Investment platform InvestEngine is joining forces with FemaleInvest to address the gender investment gap, a pressing issue highlighted by research that underscores significant disparities in how men and women approach financial risk and reward.
FemaleInvest, an organisation dedicated to empowering and educating individuals with a primary focus on women, has drawn attention to the fact that women worldwide earn, on average, 37 per cent less than men.
At the current rate, it is estimated that it will take 267 years to close this financial gender gap. These disparities are directly impacting women’s personal finances and their ability to invest in their financial futures.
In the UK, InvestEngine conducted research revealing that, while both men and women are equally likely to set money aside each month, women are significantly less inclined to invest their money. Instead, they tend to keep it in savings accounts, which offer lower returns over the long term.
Key findings from a survey of 2,000 UK adults
- Women are much less likely to have a stocks and shares ISA, with only 13 per cent reporting ownership, compared to 23 per cent of men.
- Among women who do possess an ISA, just over 13 per cent make regular deposits, compared to nearly 24 per cent of men.
- Women tend to be more risk-averse, with 62 per cent preferring low-risk investment products, compared to 56 per cent of men.
- A significant gender gap exists in prioritising returns, with 36 per cent of men emphasising returns when choosing a product, compared to 25 per cent of women.
Interestingly, while women are less likely to initiate investments, they tend to achieve better returns than men. Their tendency to maintain diverse portfolios and their preference for prudent investment strategies rather than speculative ‘lottery-style’ approaches explain this outperformance.
According to a study by Warwick Business School, women outperformed men in annual returns on investment portfolios, achieving returns 1.94 per cent above the performance of the FTSE 100. In contrast, men’s investments were just 0.14 per cent above the FTSE 100’s performance, resulting in female investors outperforming their male counterparts by 1.8 per cent.
Partnering to address the challenge
In response to these findings, InvestEngine has partnered with FemaleInvest to raise awareness about investing among women. FemaleInvest is a financial universe with a primary goal of empowering and educating individuals, with a particular focus on women. Together, they will offer a series of events throughout September, October and November to address these challenges and bridge the investment gap.
“One of the big issues is education – for example, our research shows 40 per cent of women don’t know how stocks and shares ISAs work compared to just 29 per cent of men, and this – combined with a lack of funds and aversion to risk – is creating a huge investment gap that desperately needs bridging,” said Elspeth Brown, marketing manager at InvestEngine.
Lærke Engelbrekt, community lead and webinar host at FemaleInvest, added: “We are on a mission to close the financial gender gap by educating women on everything from managing their finances to investing on the stock market and empowering them – an important part of which is ensuring they have equal access to investment tools. That is why we are pleased to partner with online investment platform InvestEngine.”
The upcoming events, led by experts at FemaleInvest, will cover various financial subjects and products, including topics such as the difference between General Investment Accounts and ISAs, understanding ETFs, and the benefits of regular investing with autopilot portfolios. These initiatives aim to equip women with the knowledge and tools to overcome barriers and seize opportunities in the world of investment.
The first event – ISA vs GIA – will take place on 13 September.
