Time to play catch-up
FIVE-MINUTE GUIDE TO... WOMEN FOCUSING ON INVESTMENT
TODAY is Internationalwomen’s Day 2020 celebrating women’s achievements, but in one area they continue to trail men, by failing to invest enough for the future.
Men are more likely to have stocks and shares Isas and retire with far more in their pension pots, even though research suggests that women are actually the better investors.
Men hold an average of £3,611 more in Isas than women, £29,448 against £25,837, while at retirement the average woman has £100,000 less pension, due to lower pay and childcare commitments.
Yet research from Hargreaves Lansdown shows that its female customers outperform men by an average of
0.25 per cent a year.
That may sound like only a small difference but if you invested this year’s £20,000 Isa allowance, it would make you £4,418 better off after 30 years.
A separate study from fund manager Fidelity shows that its female investors did even better, generating an extra
0.4 per cent a year.
Hargreaves Lansdown personal finance analyst Sarah Coles said women do better because they are less likely to take a punt on risky, get-rich-quick stocks and do not trade as often, which means they rack up fewer charges. Despite that, the Isa gender gap is actually growing. “It is depressing to see our relative position deteriorate, especially given that when women invest they tend to do better than men,” Coles said.
Too many women think that investing is not for them. However, given their attributes, they should give it a go.
They should resist leaving too much in cash Isas, which are less risky but have lower long-term returns, especially given today’s low interest rates.
“Women need to take a leap of faith in themselves, and look beyond the safety of cash,” Coles added.
Chelsea Financial Services director
Juliet Schooling Latter said attitudes are changing as women build their own careers and look after themselves financially: “They are becoming more switched on but need to be doing more.”
One issue is that the investment world is a male-dominated domain and does not reach out to women. “If you have a stocks and shares Isa or pension, the chances are most of it is being managed by a man,” she said.
Women manage just 105 of the UK’S 1,496 Uk-listed open-ended funds, according to Morningstar. “Incredibly, there are more funds run by men named David, 108 in total, than there are female fund managers,” Schooling Latter added.
Arlene Ewing, associate director at wealth manager Brewin Dolphin, said there is outstanding female talent in the investment world and highlighted three top performing female-led funds worth considering today.
Herald Investment Trust, managed by Katie Potts since its launch in 1994, invests in smaller and medium-sized UK companies and is up an outstanding
101 per cent over five years.
Aberdeen Smaller Companies Income Trust, run by Abby Glennie, is up
82 per cent over five years, while Rosanna Burcheri, co-manager of Mid Wynd International Investment Trust, returned 90 per cent from global equities.
As markets crash, you need courage to start investing now.with the deadline for using this year’s £20,000 Isa allowance looming on April 5, women need to start investing for themselves.