Women Investors Are Still Outperforming Men, Study Finds

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Although many women lack investing confidence, their portfolios still outperform their male counterparts, according to Fidelity Investments’ 2021 Women and Investing Study.

On average, women investors achieve positive returns and surpass men by 40 basis points, or 0.4%, an analysis of annual performance across 5.2 million accounts from January 2011 to December 2020 shows.

“It demonstrates that women are great investors, and when they take action, it can work out quite well for them,” said Lorna Kapusta, head of women investors and customer engagement at Fidelity.

The latest findings align with the company’s past research showing women may outshine men with a buy-and-hold investing strategy versus frequent trading, which tends to stunt performance over time.

Women Investors Are Still Outperforming Men, Study Finds

Women have also made strides beyond retirement accounts, with two-thirds now investing extra savings outside of emergency funds, a 50% increase since 2018, the findings show.

With earnings increasing for women, the momentum to invest outside of retirement had already begun in 2018, Kapusta said. However, the pandemic may have sped up some of these shifts.

While the crisis caused unprecedented financial challenges for many women, it also sparked motivation.

There has been a 43% year-over-year increase in women opening new Fidelity investment accounts since last summer, and a 37% uptick in women reaching out for guidance over the past two years, Kapusta said.

“All of these factors together really provided the right foundation for this type of necessary change,” she added.

Moreover, 9 in 10 women are ready to take proactive steps over the next 12 months, the findings show, with 62% eager to boost their knowledge of financial planning and investing.

Room to grow
While the findings show women have made progress, only one-third feel confident in their ability to make investment decisions.

What’s worse, many have too much cash outside of their emergency fund and could be missing out on potential growth.

“We’re still seeing money sitting on the sidelines,” Kapusta said.