Women investing on their own terms (2024)

She intends to top up the balance every time she saves $500. She tries not to constantly watch the balance rise and fall, determined to grow her investing portfolio over the years.

Haines isn’t alone. A growing number of women are investing on their own terms.

The ASX reports a sharp increase in the proportion of female investors. The pandemic and subsequent global financial instability provided the impetus for women to commence their investing journey.

The trend is likely to quicken in coming years, given that 51 per cent of intending investors are women. In particular, younger women are showing greater interest in investing and building wealth. The ASX research also reveals that women investors tend to hold fewer assets, were less diversified and tended to be more risk averse when investing.

Investor platforms have been particularly appealing to women starting their investing journey. Understandably so. Women don’t want to front up to an office and meet with a man in a suit telling them how to handle their savings.

BetaShares reports that the number of women using the platform to invest increased 60 per cent in the last 12 months, while male investors increased by 39 per cent. As of June 30, 2022, women make up 41.6 per cent of BetaShares investors, up from 38.2 per cent on the same period the year before.

Its data shows that female investors are using ETFs as building blocks for their increasingly sophisticated investment portfolios, BetaShares CEO Alex Vynokur says.

“We’re seeing women use ETFs to invest in international equities, with technology and ethical tilts, as well as broad exposure to Australian-listed companies. The fact that you can gain exposure to these investments in one trade is a key reason why ETFs continue to grow in popularity among investors from all walks of life,” he says.

I remember many male clients wanting to learn by skiing the most challenging runs on their first day, while women were often happy to solidify the basics.

— Christina Hobbs, CEO of Verve Super

“As more women use ETFs to build and grow their wealth, we predict there will be parity in the number or female and male investors in the coming years.”

Research from online trading platform Moomoo suggests that men tend to be bargain-hunters when investing, willing to seek value in cheap or undervalued stocks, suggesting they’re more willing to take on risk.

Women, on the other hand, are more conservative, and largely look to reduce risk in their portfolios as much as possible, research shows.

The research also found that while men take more advantage of inputs from friends and family overall, social investing is playing an important role in lowering the barrier to entry for women.

Online trading platforms and communities have been a catalyst for 57 per cent of women to engage in investments.

When contemplating an investment opportunity, women tend to focus more on the softer elements of a deal, such as the people, teams and collaboration, along with the numbers to determine the worthiness of a venture.

“Women tend to weigh up whether someone is passionate about their business and if they’re solving problems in the market,” says Dr Michelle Deaker, founding partner and managing director of OneVentures.

Dr Deaker is actively working to broaden diversity at all levels, including on Australian boards.

She’s currently mentoring female fund managers, and is particularly focused on breaking down the day-to-day complexities that women face when investing by nurturing women through the process.

“I’ve been on boards of companies that were all male. And I just pointed out to them that they were sitting there making a decision when 90 per cent of their customer base were women, and yet they weren’t being represented on the board.”

Women have different characteristics as investors. They tend to remain dubious about the virtues of cryptocurrency, for example. Analysis by micro-crypto investing platform Chillur found that 37 per cent feel investing in cryptocurrency is too risky, while a quarter (26 per cent) don’t want to lose money. The research suggests that women can be more cautious investors.

A key barrier women face is a lack of confidence in the economic outlook. More than half of women are concerned with both the short-term and long-term health of the economy, research by Fidelity International reveals.

Confidence in the system is an essential condition for anyone to start investing, which is why a lack of confidence in the economy may be a barrier to women engaging with their money, taking control and starting to invest, the report shows.

The finance industry needs to take some of the blame, given that the finance industry is missing the mark when communicating with women. Half the women say investment communication is complicated, and one in four describe it as intimidating, according to Lauren Jackson, business manager of Fidelity International.

The appetite for investing is stronger among women, but they’re facing barriers to entry, particularly around affordability of service, Jackson says.

Investing managers at Fidelity are actively working to raise awareness and reduce some of the barriers to women starting their investment journey. But Jackson admits the broader industry still has a way to go.

The language used by industry is still very much in its infancy of trying to break down the barriers that exist, Jackson says.

Fidelity research suggests that there’s also a lot of scepticism among women when it comes to environmental, social and governance (ESG) investing. Two in five women think sustainable companies won’t match the promises they’ve made.

Half of the women surveyed believe that sustainable investing seems subjective, and there’s no definitive agreement about what it means in practice. And one in four women agree it’s impossible to invest sustainably and get a good return.

As a result, women may prioritise strong returns, ease of understanding and low risk over sustainability and responsibility when selecting investments, the research suggests.

But there’s still a long way to go. A significant portion of women still aren’t investing, despite having cash reserves in their bank, research by Verve found.

The ethical super fund for women reveals that more than half of survey respondents had over $3000 sitting in a bank account and more than a quarter (26 per cent) had more than $30,000.

The key reason that women cited for not getting started was not being sure how to get started, says Christina Hobbs, CEO of Verve Super.

“Many women are also saving for a house as their first investment, and were not investing in short-term options, with a significant portion of women putting their additional savings in a mortgage offset account (24 per cent) rather than investing it,” she says.

“Women are often portrayed in society as frivolous spenders, and are used to being told that we’re bad with money. Women are also renowned for being more cautious investors. Often, this is assumed to be because women have less experience or less confidence,” she says.

“The reality is that these messages seep into the subconscious of women, so women are often a lot more hesitant than men at investing. But perhaps that makes us better investors, because we often take time to really understand what we’re doing by the time we start making investments,” Hobbs says.

Before becoming CEO of a super fund, Hobbs was a ski instructor.

“I remember many male clients wanting to learn by skiing the most challenging runs on their first day, while women were often happy to solidify the basics on the flat before even getting on a chair lift. It’s a little like that with investing. I think many women want to start on the easy runs and work their way up,” she says.

Sometimes, it’s just a matter of getting started. Lara van Raay admits the intention to begin her investing journey was there, but she’s the first to admit that she’s dragged her heels over the years.

At one stage, the freelance film-maker even filled out half of the paperwork to buy some shares, but put it to one side and never finished filling them out.

“A friend insisted I get into shares and investing. She kept telling me that I could earn more than I could on interest from the bank.”

It sounded appealing, but Lara didn’t make a start. “My friend was so insistent that she actually bought my daughter shares for her birthday. She told me ‘right, you manage those’. So I was on my way.”

Lara was instantly drawn to a sustainable, green fund. She admits she’s not in front yet, but is determined to hang in there. “I’m only interested in funds that make the world a better place. I’ve spent a lot of my energy avoiding companies that aren’t ethical citizens,” she says.