Why Women are Better Investors Than Men

I guess there is a reason why women are typically the go-to members of the family when it comes to budgeting and money management. A couple of studies just out, show that when it comes to saving and investing, women once again beat their male counterparts.

Women typically save more. Research by Fidelity investments shows that the average woman saves about 9% of their monthly pay while men save 7%. These dollars add up to a whole lot over an extended period of time. Extensive research conducted by the likes of Terrance Odean and Brad Barber also show that not only are women better at saving, they also make much better investors than men. Women outperform men by at least 1% in investment returns per year.

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Great stewards of their own portfolios

Other studies have sought to understand why women earn higher returns on investment than men. A study of approximately 60,000 investors done by advisers at "robo-advisor" found that one of the factors influencing the difference is that women overall logged into their accounts 45% less frequently than men. Women also changed their asset allocation 20% less frequently than their male counterparts.

Better Fund managers

I find that women not only make better investors, but certain typical characteristics of women make them better stewards of investment capital. Women will typically adapt the style of a natural value investor, picking equity holdings that provide value over a longer period of time. Women will employ traditional risk management techniques and will usually produce higher returns when employed in an institutional investor capacity.

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For example, researchers examined hedge funds with all-female portfolio managers (they were able to find 244 such funds), and found that women-run funds would outperform ones headed by men over a long period of time.