How women invest: Key insights from CMC Markets

Female and male investors often exhibit different investing behaviours, and preferences for specific markets, according to Amy Wang of CMC Markets. 

At a time when there are signs of growing participation of women in investment markets, global online brokerage CMC Markets is observing distinct gender-based approaches that can help understand market dynamics. 

Amy Wang from CMC Markets’ Alpha Invest team believes male and female investors display markedly different behaviours that can potentially impact portfolio performance. This is particularly relevant at a time when financial markets are experiencing their longest bout of volatility in years. 

“Women are more focused on the long-term return; they are more patient and like their portfolios to be more balanced. That can help clear some of the noise, especially in a volatile market,” says Wang, a 10-year industry veteran and a relationship manager at CMC Alpha Invest. 

The gender investment gap has been a constant in financial markets for years, with women generally seen as more likely to save but less likely to invest than men. However, several studies in recent years have shown that the tide has been turning. 

According to the latest ASX Australian Investor Study, an estimated 4.3 million women had investments in 2023, an increase of 600,000 since 2020. Women now comprise half of all new retail investors on the Australian Securities Exchange, a distinct change from past years. The study found that half of all investors who intended to invest in the next 12 months were also women. 

It’s a trend also becoming evident within CMC’s client base. Over the last five years, women’s participation on the premium Alpha desk has increased from 10% to 18%. 

“You can see the trend is slowly increasing over the past few years,” Wang says, adding that there has been an increase in female clients and women taking on trading roles within CMC over time. It’s a gradual shift, but a positive one to see,” she says. 

Differing investment approach

With the number of women investors on the rise, an increasingly relevant question for investment professionals has been the extent of their differing preferences from male investors, who still form the bulk of the investor community. 

Although investors span the entire trading spectrum based on their individual strategies and risk profiles, generally, there is a clear distinction in the investment approach displayed by the two genders, which is related mainly to risk taking and activity levels. 

Male investors are generally inclined towards active investing and are more focused on short-term returns, Wang says. They also tend to have higher trading volumes and usually trade more frequently. 

“They keep track of the market news and react more quickly or adjust their trading strategies based on the market movement. They are also big risk takers, so they like market volatility.” 

By comparison, women focus on the long-term return and are less emotional. They also tend to hold their positions for longer periods. 

“Women are more focused on the long-term return, they are more patient, their portfolios ARE more balanced. That can help clear the noise, especially in a volatile market.”

Amy Wang

Women also benefit from being calmer, especially when the market is volatile. They tend to choose stocks they are familiar with; otherwise, they will do more research before trading. 

The varying approaches can often lead to differences in how both categories construct and manage their portfolios. 

Men are more likely to choose risky or more volatile stocks.  

So, for example, when the market is going down, they tend to average their positions, and if the market turns quickly, they may score huge returns in the short term. 

By comparison, women tend to trade a lot less.  

“Women are more likely to invest in high dividend stocks or defensive sectors. They probably will think about index ETFs, because they want long term returns,” Wang says. 

“In general, men tend to have a higher risk appetite. In a bull market this can have a positive impact on returns,” says Fraser Allan, head of premium client services at CMC Markets. 

”However during a downturn this approach can offset gains made during the boom.  

“Instead of being overconfident, women are potentially more realistic and grounded in how they assess their abilities.” 

Navigating a path

That approach could prove beneficial in the current volatile environment, where financial markets have been buffeted by a range of factors, including tariffs imposed by US President Donald Trump, fears of a global economic slowdown and a number of geopolitical risks. 

With the markets in a correction phase and full of uncertainties, Wang has observed that many clients have been cutting back on risk at the moment. 

“Some long-term investors are sitting tight, waiting for clarity, while short-term traders are locking in profits and may look to re-enter later in the correction phase,” she says. 

Working with a high net-worth, mostly male client base, Wang has faced some early scepticism about her capabilities. However, over time, most clients have come to appreciate her warm, efficient approach, market insights and practical trading strategies.  

That trust is shown in the fact that many clients have referred their friends and family directly to Amy. 

Wang says one of her challenges has been overcoming preconceived notions about women working in the financial industry.  

Still, the situation has improved gradually with a growing number of women professionals in the space, especially in client-facing roles such as sales, client servicing and marketing. 

Training sessions, events where colleagues share their experiences, and supportive managers who provide resources and opportunities have also made a big difference.In turn, Wang’s advice for women starting in the finance industry is  quite simple,.  

“Try different roles to find the potential for your strengths and skills,” Wang says. “Whatever you choose, you have to be passionate about the market, and persistent.” 

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Fore more information, visit: www.cmcmarkets.com/en-au 

Seek independent advice and consider the relevant Terms and Conditions at www.cmcmarkets.com/en-au when deciding whether to invest in CMC Markets products. CMC Markets Stockbroking Limited (ABN 69 081 002 851, AFSL No. 246381)