I How Women Are Investing Wealth

Wealth

How Women Are Investing Wealth

Studies are showing that women around the world are getting richer and more financially savvy, and as they do so their influence on global economies is also growing.

Globally, women

today are generating and managing a growing amount of wealth, and some of them are directing economies. Some of the top financial institutions in the world today are headed by women. For example, Kristalina Georgieva is the current managing director of the International Monetary Fund (IMF) and the former CEO of the World Bank. American economist and educator Janet Yellen became the first woman to head the U.S. Treasury Department in 2021.

About 32% of the world’s wealth is controlled by women and they are adding $5 trillion to the wealth pool globally every year, according to a 2020 study by the Boston Consulting Group (BCG). Women accumulated wealth at a 6.1% compound annual growth rate (CAGR) from 2016 to 2019. That rate is expected to accelerate to 7.2% by 2023.

Investment banking firm UBS revealed this year that the Covid-19 pandemic saw an increase in the number of women interested in taking control of their

Janet Yellen became the first woman to head the U.S. Treasury Department in 2021.

finances. The company’s 2021 Investor Pulse survey showed that 68% of women had started talking more about finances within their families. A study from asset management firm Fidelity Investments revealed that about 67% of women are now investing outside their retirement plans, an increase of 23% since 2018. According to RBC, 21% of women with $5 million or more in investable assets are founders or owners of a business. Studies from investment management company Merrill have shown that women’s portfolios outperform men’s by an average of 0.4% to 1.8% annually, which over time can have a major impact. Merrill listed four reasons for this performance: women are generally steady and patient investors; they aim for a more balanced, risk-averse, and more diversified asset allocation; they do research and ask questions before investing; and they invest with goals in mind, which help investors to stay focused.

Women are also getting more hands on in growing their money—a trend that is expected to continue. Fidelity Investments’ study in 2021 showed that nine in 10 women said they planned to take additional steps to get more engaged in the next 12 months.

With women comprising 13% of the Middle East’s wealth, they have become a sizeable economic force, according to a BCG report in 2020, with women’s wealth accounting for about $786 billion. In the period up to 2023, the Middle East will continue to witness robust growth, which will be driven primarily by greater political and economic stability across the region, as well as continuous improvements in healthcare and educational access for women.