Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 332

Young women are investing more in shares

While share ownership in Australia (and around the world) is dominated by men, there are encouraging signs that the wealth gap may close over time, as younger women start investing to build wealth. In a recent analysis by nabtrade, Gen Z women (the generation born between 1995 and 2015, following the Millennials) hold 20% larger portfolios than men of the same age.

Women's wealth traditionally held back

Demographic headwinds such as time out of the workforce to have children and lower average salaries have generally prevented women from accruing wealth at the same rate as men, resulting in a substantial wealth gap between the sexes in older generations.

In younger people, however, women are building portfolios through a combination of careful stock selection in large companies and much lower turnover rates than their male peers. This results in larger portfolios and lower transaction costs. In contrast, young men are more likely to hold stocks outside the S&P/ASX200 and to trade more frequently.

While women typically trade far less frequently than men across all age groups, they also trade in larger parcel sizes relative to their overall portfolio holdings. This aligns with global research since the 1990s, which suggests that men may be prone to overconfidence in their trading. Research shows men actively turn over their portfolios, which may reduce returns through excess transaction costs and imperfect market timing, while women place fewer trades and show greater commitment to their long-term investment strategies.

Stock selection

Individual shareholdings also differed between the genders across the generations, with women favouring staples such as Coles and Woolworths, as well as retailers including Harvey Norman. Women were also more likely to hold Bubs Australia and A2 Milk than their male counterparts.

nabtrade data showed women tend to stay with stocks and sectors that are familiar to them, meaning they are more likely to hold bank shares and less likely to invest in direct international shares than men across all age groups. While female investors showed a strong preference for ethical ETFs and were also much less likely to hold gambling and energy stocks than men, they were equally likely to hold one of the big miners.

Stock/Sector/Instrument Type

More likely to hold

Coles and Woolworths

Women

Retail sector

Women

Big Miners

Equal

Big Energy

Men

Gambling

Men

A2 Milk, Bubs Australia

Women

Domestic ETF

Women

International ETF

Men

Ethical ETF

Women

Differences between generations

While Gen Z women hold larger portfolios than their male counterparts, and Gen Y portfolios are of similar size between the sexes, female Baby Boomers hold just 56% of the portfolio size of men in the same age group. Gen X women hold portfolios nearly 78% the size of a man’s in the same age group.

These statistics paint a particularly dark picture of women’s economic wellbeing when couples commonly (and logically) choose to invest in the name of the lower-income earning spouse, typically the woman. Once accounting for this bias, the value of women’s overall holdings is further reduced.

The rise of online share trading and the proliferation of low-cost products such as ETFs has allowed young people of both genders to come to the share market at a younger age than previous generations, giving them a head start in wealth creation. As these investors grow in confidence and experience, it is hoped they will continue to invest for their future.

 

nabtrade is donating all brokerage on 27 November 2019 to help drought-affected farmers – find out more.

 

Gemma Dale is Director of SMSF and Investor Behaviour at nabtrade, a sponsor of Firstlinks. This material has been prepared as general information only, without reference to your objectives, financial situation or needs. For more nabtrade insights or to open an account, visit the website. You can also access Gemma’s weekly Your Wealth podcast on nabtrade, or via Apple podcasts, Spotify or Podbean.

For more articles and papers from nabtrade, please click here.

 

RELATED ARTICLES

Most women say unprepared for retirement

banner

Most viewed in recent weeks

Nest and nest egg: 23 aspects of housing and ageing

The family home is the biggest asset of most Australians across all age groups, and its role as both a place to live and an investment makes home ownership the biggest retirement policy issue.

20 favourite investment and life lesson quotes

Favourite quotations from famous people on markets, investing, processes, noise, pessimism, self perception and life balance. These lessons carry across investment cycles and lifetimes.   

Sorry, there’s no real place to hide

Billions of dollars of personal savings are flowing into 'fixed interest' funds, but do investors understand the risks? These funds have a place but they are not a short-term haven for worried retirees.

Media worth consuming - November 2019

Links to dozens of global media articles that often do not receive mainstream coverage in Australia. It's sceptical, fun and revealing, often challenging consensus and accepted wisdom.

We need national and personal visions for retirement

Two different articles cover a recent report on the attitudes of Australians towards retirement. What should be a enjoyable life stage is feared by many, and they fail to plan and work towards it.

How ‘residential for rent’ may change Australian housing

Australia has lagged many developed countries in providing top quality rental accommodation owned by institutions, but it is changing, driven by social preferences, affordability and investor needs.

Latest Updates

Investing

Millennials struggle to invest, but property top priority

The investment industry is looking for the best ways to engage with millennials. While younger people want to invest, they are either saving for a home or cannot afford to invest at the moment. 

Superannuation

Four major insights from APRA’s super heatmap

Check your fund on the heatmap. Many super trustees must decide whether to stick with their strategies or accept that APRA will take a tough approach to weeding out underperformers with high fees.

Superannuation

Checking the temperature of the APRA heatmap

The APRA MySuper heatmap uses a consistent methodology, and some funds come out badly. How will members and trustees react, and should APRA have sorted out the problems privately? 

Exchange traded products

Australian ETFs further widen their appeal

ETFs continue to increase strongly, especially in the fixed income category, with younger people and advisers among the major growth categories. Within a year, assets could hit $75 billion. 

Shares

A decade of Aussie shares: who delivered, who dithered?

Following the uncertainty of the GFC, 2010 to 2019 delivered decent Australian share results overall, with wide variations by sector. It's fascinating to see who won and lost over the decade.

Sponsors

Alliances

Special eBooks

Specially-selected collections of the best articles 

Read more

Pandora Archive

Firstlinks articles are collected in Pandora, Australia's national archive.

Read more