The $3 Trillion Question: What if Women Invested at the Same Rate as Men?
What You Need to Know
Some $1.9 trillion would flow toward investments with a positive impact on society and the environment, BNY Mellon estimates.
Only 9% of women surveyed said they had a high or very high level of investment risk tolerance.
Seventy-three percent of asset managers said their organization’s investment products are aimed primarily at men.
Think about this: If women invested at the same rate as men, there would be at least an extra $3.2 trillion of assets under management from private individuals today.
Not only that, some $1.9 trillion of that capital would flow toward investments with a positive impact on society and the environment.
These were among the findings in a new report released by BNY Mellon Investment Management, the first in a series on diversity that seeks to understand the barriers preventing higher levels of female investment participation and the potential effect if investing were more accessible to women.
The research identified key barriers to women investing. First, women around the world believe that they need $50,000 of disposable income per year, on average, before they invest some of their money.
Second, only 9% of women said they have a high or very high level of risk tolerance when it comes to investing. Forty-nine percent reported a moderate tolerance for risk, and 42% said they had low tolerance.
Third, just 28% of women globally said they feel confident about investing some of their money.
BNY Mellon asserted that the industry needs to consider how to better engage and inspire more women to invest, which could increase their confidence and participation.
“Looking at the research, it’s clear that increasing women’s participation in investment is critical for their personal prosperity and to help shape a more equitable future for all,” Hanneke Smits, chief executive of BNY Mellon Investment Management, said in a statement.
“Doing so will also potentially help increase the allocation of capital for the benefit of society and the environment.”
Coleman Parkes Research conducted the study among 8,000 respondents across 16 markets in Asia, Australia, Europe and North America, including both consumers who already invest as part of their future financial planning and those who do not invest.
The firm also interviewed 100 global asset managers representing asset management firms with nearly $60 trillion of combined assets under management as of the second quarter of 2021. Finally, researchers held in-depth discussions with an international advisory panel who provided their perspectives on the research and their ideas on making investment more gender-inclusive.
Values Count
The research found that women want more than just a financial return on their investments, and encouraging greater levels of female investment could see even more capital flowing to funds with social and environmental goals.
