The power of women in investing

The question of whether women make better investors is one that is passed around every year during Women’s Month. Gender-specific personality traits such as humility and a willingness to cut losses have been given as reasons why women make great - if not better - investors, along with their openness to advice and collaboration, curiosity and interest, and trust in people and process.

Research swings marginally in favour of women as better investors, with Fidelity’s 2021 Women and Investing study revealing that women capture stronger rates of return than their male counterparts, outperforming men by 40 basis points, or 0.4% on average between January 2011 and December 2020.

The US Bank’s 2022 Women and Wealth Insights study shares a similarly positive story, with 55% of women expressing confidence in their ability to manage finances - an increase of 7% year on year – and spearheaded by the under 35s at 71%.

More recently, on 30 April 2023, Forbes claimed: “The verdict is in: Women are better investors than men” and concluded “the evidence seems to suggest that the much quieter traits of humility, patience, and deliberation are those most likely to lead to reward investors, whether men or women”.

Yet the investment industry remains very much a male-dominated environment, where women occupy just 10% of portfolio management roles and 2% of senior portfolio management roles. Of additional concern are the findings from the Women in Finance charter, whose aim is to work to build a more balanced and fair financial service industry, which noted a flatlining of female representation between 2020 and 2021.

For the female professionals at asset management firm Futuregrowth, the idea of women empowerment within investing takes on its own meaning, as viewed from different parts of the business.

Why the narrative needs to change

Head of Credit Olga Constantatos does not believe that women are inherently better or worse investors than men. In fact, she says that by stereotyping generalised behaviours relating to gender within the investment industry, there is an expectation put on women that disallows them the freedoms that men are granted.

“By using certain words like ‘collaborative’ to describe women in investing, it labels and often rebuffs the women who don’t fit into that mould. To really unlock the power of women investors, it is vital that we, as women, do not subscribe to these stereotypes. Everyone is an individual who brings something different and unique to the party, and at Futuregrowth, we want to encourage diversity across all levels, including, but not limited to, gender.”

Why women love investing

Portfolio Manager Thina Tiyo feels she brings an authenticity and relatability to her collaboration with clients.

“In a jargon-ridden industry, it’s important that we, as portfolio managers, convey information to clients in an understandable manner. As our clients come from all backgrounds, with different levels of understanding of the investment world, it is our responsibility to make sure everyone is in the room.”

Tiyo’s job brings her a sense of meaning and she is proud to play a key role in a supportive team in a high-pressure environment.

“I always think of who is ultimately going to benefit from what I do – and remind myself that I am helping them to retire comfortably.”

For Business Development Manager Ziyanda Tshaka, her greatest reward is watching client relationships evolve. She believes women have the edge in building longstanding client relationships because they are naturally more maternal and nurturing.

“Putting clients’ needs above my own is a top priority, and it is equally important to show empathy and care when dealing with their investments. It is satisfying to see client relationships strengthen over time, while knowing that my clients can depend on me.”

In this industry, she believes it is most important to actively listen to your clients. “Money is an emotional affair and we are in the trust business, so really hearing what your clients need and consistently touching base with them is crucial in client retention.”

Why making an impact is important

For many years, Futuregrowth has been at the forefront in changing the culture in South Africa through its development funds, with 61% of jobs created by these investments held by women (as at August 2022).

“There is a growing awareness of social and environmental issues, such as climate change, diversity, equity, inclusion and poverty. Investors are seeking ways to address these issues through their investments and are choosing to invest in companies that prioritise these issues as part of their business practices. As a result, they are investing in companies and projects that are creating positive social and environmental impact, driving sustainable change and at the same time earning a risk-adjusted return”, says Angelique Kalam, Head of Sustainable Investment Practices at Futuregrowth

Why Futuregrowth takes women in investing seriously

To date, women are massively under-represented in the asset management industry as a whole. Through Futuregrowth’s transformation agenda, a priority is placed on diversity, which is evident in the rising female representation at the coalface of the organisation. Some of the most senior roles in our investment team are held by women, who, as at 31 December 2022, accounted for 39% of the team. Although this is relatively high for our industry, we are working to improve this ratio.

Head of Risk Management Daphne Botha says that the range of leadership roles within the Investment team has also been expanded to allow for a greater variety of leadership positions and opportunities for career growth. And while she believes Futuregrowth is ahead of many of its peers in terms of its gender balance, improving the representation of women in the industry will take more than just conscious thinking.

“Each company needs to put a plan in place on how they will tackle the diversity problem. Smaller companies are able to effect change in a faster and more meaningful way, but for a big asset manager it is a longer, more complicated process. Scale matters and we need the bigger houses to come to the party. At Futuregrowth, female representation is of upmost importance and we will continue to do what we can to close the gender gap, at the same time as giving all of our team members the opportunity to be powerful investors.”