How women investors give men a run for their money

Fewer trades, better returns – women tend to make better investors. Ruth Jackson-Kirby asks why more aren't doing it

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For an industry dominated by men, investing holds a surprising secret: women often outperform their male counterparts.

In finance there has always been a lot of focus on men. Around 87 per cent of fund managers are men, according to Citywire. Until recently, our chancellors in the UK had all been men and, traditionally, men handled the money in households.

It wasn't until 1975 that women could even open a bank account without their husband or father's signature, let alone thinking about starting to invest.

Dig into the data, though, and women tend to be stronger investors. Research by AJ Bell found that women hold more ISAs than men. Plus, when women invest they tend to outperform men. Barclays tracked 2,800 of its investment customers and found that female portfolios gained 1.8 per cent more a year than those held by men.

So, what can we learn from women's investment habits?

Trade less

Men, typically, are more active traders than women; in other words, they buy or sell more often. Data from AJ Bell shows that, on average, men make 12 trades per year whereas women make 25 per cent fewer trades.

Women also tend to react less emotionally to their investments, holding on through market volatility.

Danni Hewson, head of financial analysis at AJ Bell, said: "This suggests less fiddling with portfolios after making their investment decisions at the outset, resulting in the side benefit of paying less in fees and reducing the risk of falling foul of market volatility."