Women investors outpace men in returns despite lower participation rates, data shows

Women who commit their capital to the financial markets achieve marginally superior long-term returns compared with their male counterparts, according to fresh analysis that underscores a persistent participation gap between the sexes. The findings, which draw on data from multiple financial institutions, reveal that while only approximately 26% of British women hold investments—a figure that dips to 23% among those under 45—some 41% of all men and 40% of men under 45 have money in the markets. This disparity in engagement, however, appears to be counterbalanced by a notable difference in performance when women do choose to invest, with Fidelity International’s analysis of its personal investing customers over a three-year period showing cumulative returns of 50% for female clients against 47% for male clients.

The story of Teleri Evans, a 33-year-old civil servant from Cardiff, exemplifies the potential rewards of disciplined female investing. Having begun saving into a Help To Buy ISA at the age of 25 before later opening a stocks and shares Lifetime ISA, she accumulated £40,000 by her early thirties, of which £8,000 represented returns on her investments. Her strategy, she explains, involved aggressive saving while living with her mother for half that period to maximise her annual £4,000 Lifetime ISA contribution, and she recently used the funds towards a house deposit with her partner. The question of why fewer women invest than men has been attributed by experts to cultural factors, with Gillian Fleming, co-founder and managing director of the women-led angel investment firm Mint Ventures, suggesting that men have historically dominated family investment decisions and that women have traditionally not held the balance of wealth, though she notes that this is changing. Fleming also observes that money and wealth creation remain topics that women discuss less frequently, a pattern she expresses a desire to transform, a sentiment echoed by Evans, who has noticed increased discussion of investing within her friendship group.

A potential explanation for women’s superior returns lies in their trading behaviour, with Barclays data indicating that female investors trade approximately half as frequently as men, a pattern that may reflect greater patience and risk awareness. Joanna Floyd, a business psychologist at London-based The Work Psychologists, points to studies showing that male investors tend to trade more in pursuit of higher returns, yet it is women who ultimately achieve better outcomes, suggesting that the very restraint which initially keeps women out of the market is what rewards them once they participate. This more cautious approach extends beyond investing, with women more likely to choose certainty when confronted with financial gambles, and Fleming characterises this not as risk aversion but as being more “risk aware,” noting that male investors typically focus primarily on the rate of return. Furthermore, Fleming contends that women appear to invest more broadly across sectors, with men more inclined towards technology companies for their higher potential returns, while women favour a wider range including retail, food and drink, health and beauty, femtech, and creative industries.

Anna Macdonald, investment strategy director at Hargreaves Lansdown, concurs that women exercise greater care in selecting companies, appearing to place relatively more weight on the destination and impact of their money, as well as seeking reassurance that an investment is appropriate for them, whereas men are more readily attracted by potential financial return. Jemma Slingo, pensions and investment specialist at Fidelity International, adds that female investors seem more likely to connect investing with tangible life goals, from building emergency savings to providing for children. It is important to acknowledge, however, that women in the UK generally have less money to invest than men due to the persistent gender pay gap, which means they earn less on average. Macdonald concludes that the investment sector must improve its efforts to make investing feel accessible, relevant, and connected to people’s own goals and values, arguing that addressing this would benefit both women’s long-term financial resilience and the broader UK economy.