Invested in my 20s and made £8,000: Why women often outperform men
New analysis reveals women achieve slightly higher long-term returns than men, despite a smaller percentage of UK women actively investing.
Stock photo for illustration only, not from the actual event
- Female investors achieve slightly higher long-term cumulative returns than men.
- Only 26% of women in the UK currently have investments.
- Women trade half as frequently as men due to a more cautious approach.
- Cultural barriers and the gender pay gap continue to limit female market participation.
New analysis suggests that women who invest their money achieve slightly higher long-term returns compared to men. However, a separate report highlights that only about a quarter of UK women hold investments, contrasting sharply with roughly 40% of men. These figures point toward fascinating differences in how each gender approaches the world of investing.
Consider the journey of Teleri Evans, who was 25 when she began saving into a Help To Buy ISA before taking out a stocks and shares Lifetime ISA a couple of years later. By the age of 33, she had accumulated £40,000 in savings, with £8,000 of that total coming directly from investment returns. The civil servant from Cardiff used these funds earlier this year alongside her partner as a house deposit.
Data from consumer finance website Boring Money indicates that 26% of UK women invest, a figure that drops to 23% for those under 45. In contrast, 41% of all men participate in investing, holding steady at 40% for the under-45 demographic. This naturally raises the question of why fewer women choose to invest than men.
Gillian Fleming, co-founder and managing director of the UK-based women-led angel investment firm Mint Ventures, attributes this gap largely to culture. She points out that men have historically driven family investment decisions and held the balance of wealth, though this dynamic is shifting. She adds that wealth creation remains an infrequent topic of conversation among women, a habit she hopes to change.
Stock photo for illustration only, not from the actual event
From a behavioral psychology standpoint, caution acts not just as a barrier keeping women out of the market, but as a safeguard against over-trading. While frequent buying and selling often erodes returns for male investors, a measured pace allows female investors to capture steady long-term gains without falling into the trap of volatility chasing.
Understanding this psychological distinction sheds light on why lower market participation does not equate to lower performance once inside the market.
When examining performance, research by Fidelity International discovered that over a three-year period, female personal investing customers recorded cumulative returns of 50%, compared to 47% for men. While the analysis does not pinpoint the exact cause, Barclays data offers a major clue by showing that women trade about half as frequently as men.
"The restraint that keeps women out of the market in the first place is the very same thing that rewards them once they are in it."
Joanna Floyd, business psychologist
Joanna Floyd, a business psychologist at London-based The Work Psychologists, explains that women tend to be more patient and risk-averse. She notes that male investors trade more aggressively in pursuit of higher returns, whereas women ultimately secure better results through restraint. This cautious risk appetite extends beyond finance, with women generally favoring certainty when faced with financial gambles.
Fleming also observes that women diversify more broadly across industries. While men gravitate toward technology companies for higher potential returns, women spread investments across retail, food and drink, health and beauty, femtech, and creative sectors.
Anna Macdonald, investment strategy director at Hargreaves Lansdown, agrees that female investors choose companies carefully. She notes that women place greater weight on the destination of their money, its societal impact, and personal reassurance, whereas men are more readily attracted by potential financial returns alone.
Jemma Slingo, pensions and investment specialist at Fidelity International, adds that female investors connect investing with tangible life goals, ranging from emergency funds to childcare. At the same time, experts emphasize that UK women generally have less disposable capital to invest due to the ongoing gender pay gap resulting in lower average earnings.
Source: BBC Business
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