Young women finally making strides in ETF investing

Many studies have shown that women make great investors.

In general terms they research more, use less debt and take a long-term view, which is why the latest Investment Trends figures are such great news.

The report showed that young women are now leading the charge among exchange traded fund (ETF) investors, being one of the fastest growing groups to take advantage of the instant diversification and low fees ETFs offer.

ETF’s becoming portfolio core

The ETF Investor and Adviser Report found that investors were increasingly using ETFs as the core of their portfolio, making up more than 25% of their portfolio and are also embracing thematic investing, with renewable energy being the most popular.

The report showed recent entrants to the market were on average younger and more likely to be female – an impressive 21% of new ETF investors were females aged between 18 and 34 years old.

The number of female ETF unitholders nearly doubled to 423,000 in 2021 amid burgeoning demand from younger consumers.

Young women trying to close the gender investing gap

“Young women are on a mission to close the gender investing gap and determined to take charge of their financial future,’’ said Irene Guiamatsia, head of research at Investment Trends.

“They are eager to grow their knowledge and skills, highlighting education opportunities for issuers, financial advisers and investing platforms.

Ms Guiamatsia said ETF adoption “reached new highs in 2021 among both investors and advisers.’’

Passive investment seen as cautious

“Whether judicious or otherwise, retail investors tacitly associate passive investing with a cautious approach.

“The (ongoing) market turbulence certainly appears to have propelled a product that already had strong wind in its sails,” she said.

“2021 was a significant inflection point that saw the concepts of ‘doing good’ and ‘doing well’ finally coalesce in investors’ minds, with ETFs seen as the vehicle of choice providing ease of access,” said Ms Guiamatsia.

Overall, ETF investor numbers climbed 33% in 2021 to include more than 1.7 million investors, including 1.3 million men and 425,600 women.