For many years, investing was a boys’ club, as women were considered more risk-averse and the financial services industry gender-biased.
However, it is gradually becoming a level playing field, as women are relying less on others to manage their money and increasingly taking control of their finances to build long-term wealth and financial independence through investment.
UAE-based Danielle Lecomber, from the UK, who is in her mid-30s, says her investment portfolio is a blend of stocks, fixed interest, bonds, property and alternative assets such as derivatives.
She attributes her financial savviness to her mother, who was very good with money and taught her the importance of saving and the need to be financially independent from a young age. Ms Lecomber recalls saving to buy her first property in her 20s.
“I knew at that point in time that I would be able to achieve better returns by investing in stocks and shares versus cash, for example, over the longer term,” says Ms Lecomber, who is the founding partner and chartered financial planner at wealth management company St James's Place.
“My stock portfolio is a blend of active and passive funds, rather than individual stocks. I have bought individual stocks before but as a woman I'm very comfortable with high-risk investments. I prefer to stick to multi-asset funds or exchange-traded funds.”
Women have never been wealthier, on average, than today. An estimated 32 per cent of the global private wealth was in the hands of women in 2020, a BCG report found in 2021.
There are 344 female billionaires in the world, controlling $1.7 trillion, with their assets growing faster than those of their male counterparts, last year's UBS Global Wealth Report found.
Longer life expectancy and meaningful strides in financial inclusion mean female wealth in general is set to continue to grow, UBS said in its more recent Gender-lens investment report.
Increased access to financial education through books that speak to women, online courses and an increasing availability of female-focused resources are driving the rise in new investors, says Carol Glynn, founder of Conscious Finance Coaching.
Purpose behind investment
Women are motivated by having a purpose for investment, beyond it simply being a sensible thing to do or a wealth builder, explains Ms Glynn. For example, they look at aspects such as whether it is for financial freedom, their children’s education, or to build a house.
Ms Lecomber agrees, saying women tend to attach a goal to their investment objectives and are more cautious.
“We are driven by the psychology of investing, whereas men tend to automate things and can detach themselves from their income,” she says.
Women also tend to hold a higher level of cash in their emergency fund, according to Ms Lecomber, who cites how she always holds a far higher reserve fund than her husband.
Are women risk-averse?
Vaishali Kuletha, 38, an Indian expat in Dubai, does not shy away from taking risks in investing. Her portfolio includes stocks and index funds in the US, properties in India, the US and Dubai, and businesses in the UAE. She and her husband recently acquired a recruitment company and a 17-year-old day care complex in Dubai.
“Business investments are far more lucrative from a cash-flow perspective than investing in stocks and property, so my goal is to acquire and grow multiple small businesses,” she says.
“But I ask for a company’s financial statements for the past 12 months before acquiring it. I also rope in my legal team to check whether the company is legitimate.”
She also recommends female investors keep updated on market news before investing in stocks.
Busting the myth about women being risk-averse, Ms Glynn clarifies that female investors are instead “risk-aware” and “risk-conscious”. They want to fully understand what they are investing in before committing, which is a strength.
They often still take the same risks as men but in an informed decision rather than a reactionary one, she says.
“Once confident, women are just as capable of taking calculated risks as men. The difference isn’t necessarily risk, it’s the mindset behind the investment,” she says.
“Women tend to seek security through investing, while men tend to seek wealth through investing. While they are both seeking to grow their money, the motivation and mindset is often very different, which then impacts our differing approaches and investing behaviour.”
However, Alison Soltani, founder of Leap Savvy Savers, believes the tendency for female investors to be risk-averse could stem from a lack of confidence or education in investing. Women tend to manage the household finances, so perhaps they focus on the saving and budgeting side, rather than investing and building wealth, she suggests.
Attitude to risk depends on a number of factors, including personal preference, timelines, societal and familial influence, and individual financial circumstances, Ms Soltani explains.
Where do women invest?
Many women favour low-risk investment vehicles such as bonds and property, Ms Soltani says.
Ms Glynn says women she works with are mostly interested in ETFs, real estate and, increasingly, Sharia-compliant or value-based investments, as well as digital assets.
founder, Conscious Finance Coaching
“Usually they have a preference for real estate or ETFs, as they are easy to understand and feel safer than other options. These options offer the risk level, transparency and security many women seek when first investing. ETFs are popular as the entry point, costs and risks are lower than most other options,” she says.
Women gravitate to investments they can fully understand, are low-maintenance and offer long-term stability over quick wins, she adds.
Is industry inclusivity rising?
Although much is being done to address barriers in the financial advisory industry, they still exist, Ms Soltani believes.
Implicit bias and discrimination could lead to women not being offered the same opportunities, either when investing or in employment.
“Although female role models in the personal finance world are starting to emerge, there aren't as many female voices as there are male,” Ms Soltani adds. "Female role models are crucial so that women have access to information, education and investment opportunities."
Ms Lecomber calls investing “a taboo subject” and urges more female investors to talk about their experiences and strategies to help inspire others.
“A key barrier to investing is that many women still feel judged or dismissed when asking questions,” Ms Glynn points out.
“Creating safe, shame-free spaces is vital, where the educators and service providers are willing to answer questions and explain all aspects of the investment instead of just focusing on the potential returns.”
Many women are alienated by technical jargon and masculine branding. Shifting to values-driven and emotionally intelligent language would create a more welcoming environment, Ms Glynn says.
She also calls for greater representation of women in advisory roles and financial education that reflects women’s “lived experiences”, such as career breaks, caregiving, unequal pay and longer life expectancy.
