Who Runs the World?

For Illustration Purposes Only

Above are some of the common gender-stereotypical associations that are prevalent across popular media and culture. In a report published by Harvard Business Review in 2020¹, it highlighted research showing that women are more risk-averse than men “when it comes to picking stocks, investing in venture capital, or making acquisitions”. It should not come as a surprise that there is a difference in financial attitudes and behavior between both genders. Conventional wisdom may suggest that most men think of themselves as “breadwinners” while women embrace the role of “caregivers”. Aside from biological differences, there are also other demographic and social factors involved here.

The finance world is traditionally male-dominated, due to its perceived “masculine” culture. This goes back to the idea of “risk-taking” in “investing”, which is more commonly identified as a “masculine” trait. Indeed, UBS Women’s Wealth 2030 report highlights that there are long-established perceptions surrounding expectations on gender roles including caregiving and financial management². The report goes on to discuss the trends that will drive transformation going forward, with women’s wealth and power continuing to expand at the fastest rate ever. To that end, a report by Boston Consulting Group (BCG) points out that while women may be more averse to uncertainty – often due to a gap in information – they are inclined to make investment decisions using a fact-based approach, rather than relying on their gut feeling³. Therefore, once they are armed with the required information, their risk appetite could be in fact similar to that of men’s. Furthermore, they tend to outperform.

There has been plenty of progress made towards breaking through these archaic constructs and beliefs in recent years. The proliferation of financial literacy knowledge that is available to us today has no doubt played a role. The same report by BCG underscores that women now control a third of the world’s wealth. At the same time, women are contributing $5 trillion to the global wealth pool every year, with this figure outpacing global wealth market growth over the next few years³.

Figure 1: From 2019 to 2023, Women’s Wealth Should Grow by a CAGR of 7.2%

 

Source: BCG Global Wealth 2019 Market Sizing Database

Bringing this closer to home – data from Singapore-based robo-advisor Endowus illuminates two compelling observations⁴: First, women generally invest less often compared to men – this reaffirms what we have learnt above. Second – and more interestingly – women redeem less often compared to men even during volatile times. They concluded that in reality, women are more aware of the risks involved, but suffered the negative bias of being risk-adverse. This could potentially portend that women make better long-term investors than men. Again, this lends weight to what was discussed earlier.

 

Figure 2: Women redeem less often compared with men even during volatile times

Source: Endowus Research

 

Figure 3: Women generally invest less often compared with men

Source: Endowus Research

 

This is ever more so relevant to us today given how the 1st quarter of 2022 has shaped up, with some market participants calling this the “new investment regime”. Inflation is rising, interest rates are going up, growth is slowing, and returns are falling – to name a few. The highly unfortunate situation in Ukraine has also added heaps of uncertainty into the markets. As illustrated by the Chicago Board Options Exchange Volatility Index (VIX) chart below, we are now at levels of volatility not seen since the onslaught of COVID-19 in March 2020. The VIX Index signals the stress level in the stock market using S&P 500 Index as a proxy for the broad market. Going back to older data results in the same conclusion – an analysis of 60,000 users in Openfolio⁵, a consumer internet financial technology company, in 2014 revealed that portfolios held by female investors performed better than those of males during a market downturn.

Financial editor and writer LouAnn Loften, published a book titled “Warren Buffett Invests like a Girl” in 2011. Her research concluded that the Oracle of Omaha has a feminine bias to his investment style. This includes having a calm temperament coupled with a long-term outlook, and holding steady under pressure⁶.

Source: Bloomberg, 16 March 2022

Many studies have shown that to achieve your ideal weight, one has to have a plan to eat right and exercise well over a sustainably long period of time. Similarly, in order to reach your desired financial freedom, while one can focus on earning more money, you can reach your goals more quickly by focusing on saving more as well. As the old adage goes, there is no better time than now.

Well so, who runs the world?

¹Source: Harvard Business review, “How the Gender Balance of Investment Teams Shapes the Risks They Take”, 24 December 2020

²Source: UBS, “Women’s Wealth 2030: parity, power and purpose”, 8 March 2021

³Source: Boston Consulting Group, “Managing the Next Decade of Women’s Wealth”, 9 April 2020

⁴Source: Endowus, “Breaking the bias on female investors”, 1 March 2022

⁵Source: Kiplinger Consumer News Service, “7 Reasons why Women are Better Investors than Men”, 15 March 2016

⁶Source: Forbes, “Warren Buffet Invests like a Girl?”, 11 June 2011

 

Download Report

 

Disclaimer

This advertisement or publication has not been reviewed by the Monetary Authority of Singapore. It is for information only, and is not a recommendation, offer or solicitation for the purchase or sale of any capital markets products or investments and does not have regard to your specific investment objectives, financial situation, tax position or needs. The information contained herein is confidential and must not be published, reproduced or distributed in whole or part to any other person without the written consent of Lion Global Investors Limited (“LGI”), and is not intended for use by any person other than the intended recipient. This publication may not be distributed in any jurisdiction or to any person where such distribution is prohibited (including Canada, Japan, the United States of America) or to US persons (as such term is defined in Regulation S under the US Securities Act of 1933).

Investments in the products mentioned herein are not obligations of, deposits in, guaranteed or insured by LGI or any of its affiliates and are subject to investment risks including the possible loss of the principal amount invested. Any information (which includes opinions, estimates, graphs, charts, formulae or devices) is subject to change or correction at any time without notice and is not to be relied on as advice. You are advised to conduct your own independent assessment and investigation of the relevance, accuracy, adequacy and reliability of any information or contained herein and seek professional advice on them. No warranty is given and no liability is accepted for any loss arising directly or indirectly as a result of you acting on such information. LGI, its related companies, their directors and/or employees may have positions in the products mentioned herein and be engaged in purchasing or selling of such products for themselves or their clients. You may wish to seek advice from a financial adviser before making a commitment to undertake any investment. In the event that you choose not to seek advice from a financial adviser, you should consider carefully whether the investment is suitable for you.

References to specific corporations/companies and/or their trademarks are not intended as recommendations to purchase or sell investments in such corporations/companies nor do they directly or indirectly express or imply any sponsorship, affiliation, certification, association, approval, connection or endorsement between any of these corporations/companies and LGI or the products and services of LGI.

©Lion Global Investors® Limited (UEN/ Registration No. 198601745D) is a Singapore incorporated company, and is not related to any asset or fund management entity that is domiciled in Europe or the United States.

Other INSIGHTS

“I will be there, and everywhere. Here, there and everywhere.” – The Beatles   Artificial Intelligence (AI) is the heart of technological revolution today. The

View More »

Artificial Intelligence (AI) is a hot topic in the asset management world with potential applications to portfolio management, trading and risk management. As active managers

View More »

FLATTER TO DECEIVE OR  CAN IT FINALLY FULFIL ITS PROMISE ? South-East Asia (ASEAN) has outperformed global, Asia and even the US markets so far

View More »

FORGING AHEAD In the Upper House election held on July 10, the ruling party coalition won 76 seats and the Liberal Democratic Party (LDP) won

View More »

  The LionGlobal All Seasons Funds (Standard and Growth) were set up in 2018 with the aim of helping investors tide through all seasons of

View More »

What is the difference between a Unit Trust and an ETF? Both Unit Trusts (also known as Mutual Funds in the United States) and ETFs

View More »

Disclaimer

This advertisement or publication has not been reviewed by the Monetary Authority of Singapore. It is for information only, and is not a recommendation, offer or solicitation for the purchase or sale of any capital markets products or investments and does not have regard to your specific investment objectives, financial situation, tax position or needs. Investments in the products mentioned herein are not obligations of, deposits in, guaranteed or insured by LGI or any of its affiliates and are subject to investment risks including the possible loss of the principal amount invested. You may wish to seek advice from a financial adviser before making a commitment to undertake any investment. In the event that you choose not to seek advice from a financial adviser, you should consider carefully whether the investment is suitable for you.

The information presented herein is for illustrative purposes only and should not be considered reflective of any particular security, strategy, or investment product. It represents a general assessment of the markets at a specific time and is not a guarantee of future performance results or market movement. Any opinions, projections or forward-looking statements expressed herein or information presented (which includes estimates, graphs, charts, formulae or devices) is subject to change or correction at any time without notice and is not to be relied on as advice. You are advised to conduct your own independent assessment and investigation of the relevance, accuracy, adequacy and reliability of any information contained herein and seek professional advice on them. No warranty is given and no liability is accepted for any loss arising directly or indirectly as a result of you acting on such information.

References to specific corporations/companies and/or their trademarks are not intended as recommendations to purchase or sell investments in such corporations/companies nor do they directly or indirectly express or imply any sponsorship, affiliation, certification, association, approval, connection or endorsement between any of these corporations/companies and LGI or the products and services of LGI. It should not be assumed that investment in the securities mentioned was or will be profitable.

This publication is not intended for use by any person other than the intended recipient and may not be reproduced, distributed or published without prior written consent of LGI. This publication may not be distributed in any jurisdiction or to any person where such distribution is prohibited (including Canada, Japan, the United States of America) or to US persons (as such term is defined in Regulation S under the US Securities Act of 1933).

©Lion Global Investors® Limited (UEN/ Registration No. 198601745D) is a Singapore incorporated company, and is not related to any asset or fund management entity that is domiciled in Europe or the United States.

This advertisement or publication has not been reviewed by the Monetary Authority of Singapore. By accessing or downloading any of the information or publications provided within LGI Direct, you are deemed to have consented to the Terms of Use (see below) and the conditions and disclaimers on the basis of which, they are here provided.

Comparing the TER cost for 20 years

Here’s the difference a low cost advantage makes to cost savings

Here's how much you pay

$190,272.13
Selected TER 1.00% p.a.

$99,912.57
LionGlobal All Seasons Fund 0.5% p.a.

By investing a fund with low TER

You may save $90,359.56 over 20 years based on an initial investment of $1,000,000 compared with a TER of 0.5% p.a.

It is enough to provide for a monthly expenditure of $3,000 over the next 2 years and 6 months.

Here's how much you pay

$271,950.61
Selected TER 1.50% p.a.

$99,912.57
LionGlobal All Seasons Fund 0.5% p.a.

By investing a fund with low TER

You may save $172,038.04 over 20 years based on an initial investment of $1,000,000 compared with a TER of 0.5% p.a.

It is enough to provide for a monthly expenditure of $3,000 over the next 4 years and 9 months.

Here's how much you pay

$345,744.19
Selected TER 2.00% p.a.

$99,912.57
LionGlobal All Seasons Fund 0.5% p.a.

By investing a fund with low TER

You may save $ 245,831.62 over 20 years based on an initial investment of $1,000,000 compared with a TER of 0.5% p.a.

It is enough to provide for a monthly expenditure of $3,000 over the next 6 years and 9 months.

TER (Total Expense Ratio) is the sum of various identified operating expenses charged on an ongoing basis to the fund’s assets as a percentage of the fund’s average net asset value calculated over a 12-month period at the close of the annual and semi-annual financial statements of the fund for all the p.a. tabs (1.0%, 1.5%, 2.0%).

The above scenarios are for illustration purpose only. Past performance, as well as any prediction, projection or forecast on the economy, securities market or the economic trends of the markets are not necessarily indicative of the future or likely performance of the funds. Calculations based purely on costs with no market movement or investment returns.