Shrewd women favour ESG stocks, report says

Women are more interested in investing in green finance than men, and their stock picks tend to perform better because of a more disciplined and less speculative approach, according to analysts.

“Women are twice as likely as men to say that it’s extremely important that the companies they invest in incorporate environmental, social, and governance (ESG) factors into their policies and procedures,” UBS said in a report released before International Women’s Day tomorrow.

Women still tend to invest less money than men, but their investments are growing faster.

In Asia excluding Japan, women’s wealth in 2020 was US$4.8 trillion, roughly half the US$9.8 trillion held by men. Women’s wealth is projected to increase to US$7.3 trillion by 2025, compared with US$13.9 trillion for men, according to data from

Boston Consulting Group. This would mean a compound annual growth rate of 8.8 per cent for women and just 7.4 per cent for men.

This trend is expected to add more money to the capital market, particularly in ESG investments, according to a separate study released by BNY Mellon Investment Management last month.

If women invested the same amount of money as men, there would have been an additional US$3.22 trillion in capital to invest globally as of last month, the study estimated.

Over the past three years, women’s investments outperformed those of men by 1.8 per cent annually, according to an analysis of 2,800 investors of Barclays Bank.

One reason women tended to have better-performing portfolios was that they traded less often, and they were usually calculated risk-takers with more discipline, the UBS report said.

Women are less emotional investors who trade less speculative investment products, according to the report.

“There are more women likely to invest in recent years, but they are more cautious than men,” said Katerine Kou Kuen, chief executive of Victory Securities, a Hong Kong-based brokerage.

“As such, women could outperform men amid a volatile market, as they tend to be more cautious in their investment.”

About 40 per cent of Victory Securities’ clients are women.

“While the younger investors like to focus more on ESG investment in recent years, the older generations of investors remain focused on the profitability of a company,” Kou said.

A survey from Nasdaq-listed Futu Holdings, which offers online securities trading in Hong Kong, the mainland and the United States, showed its female clientele in Hong Kong had increased fivefold year on year as of March 2021, while its male customers had only grown threefold over the same period.

However, the firm still has 30 per cent more male customers than female.

Elaine Wu, head of ESG and utilities research in Asia excluding Japan at JPMorgan, said she expected increased fund flows into stocks with social and biodiversity angles this year, as ESG investors looked for opportunities outside green energy.

“Some key themes we are watching are alternative meat, microlending, cybersecurity and sustainable agriculture,” Wu said.

ESG investment, which includes promoting gender diversity, will help add more women to corporate boards, according to Wu.

“Singapore and Hong Kong will require issuers to set gender diversity targets while Taiwan mandates publicly listed companies disclose metrics on workplace gender equality,” she said.

About 15 per cent of board directors at listed companies in Asia excluding Japan are women, below the global average of 25 per cent to 30 per cent.

Women could outperform men amid a volatile market, as they tend to be more cautious

KATHERINE KOU, CHIEF EXECUTIVE, VICTORY SECURITIES