A recent study by the Warwick Business School, which analysed the behaviour and returns of 2800 investors over three years, found that women outperform men by 1.8%.
By looking at a range of criteria, the study was able to ascertain a number of significant differences between the genders when it came to their investment behaviour. The behavioural qualities displayed by women investors – many of which are aligned to an outcome-based approach to investing – may explain their superior performance.
After examining these behavioural differences, Florbela Yates, Head of Momentum Investment Consulting, says that the outperformance of female investors over their male counterparts comes as no surprise.
“The study found that, generally, women tend to take a longer-view perspective and trade less frequently. This reveals a more considered approach by women, with greater focus being placed on the realisation of a financial goal, rather than the thrill of investing.”
Yates highlights that many of these same qualities which have resulted in women being superior investors to men, form the basis of Momentum Investments’ underlying philosophy of outcome-based investing. “We know that staying invested over the long-term produces superior returns, which is why we follow an outcomes-based investment philosophy that aims to shift investors’ focus away from tracking performance and towards their personal investment objectives.”