‘Masculine’ money-making strategies influenced by personal shopping habits, research shows
By Lucy Burton
“Masculine” investors do worse than women who take a “feminine” approach, researchers have found.
A study from Mannheim Business School in Germany found that both male and female investors have a tendency to back companies that match their shopping habits.
It leads to differences in typical investment baskets for men and women, with male money managers more likely to invest in car companies and women favouring healthcare, among others.
However, male investors rely “too much” on their personal shopping preferences when it comes to deciding which companies to back and are less likely to diversify, researchers said.
“If men devote more time and money to cars in their personal lives, this inclination may influence their professional investment decisions, making them more likely than female fund managers to allocate funds to the vehicle sector,” academics said.
An over-reliance on personal preferences, rather than data, can cost men between 0.1 and 0.3 percentage points in returns compared to the average “feminine” portfolio.
That means someone who invests £100,000 in the average “masculine” portfolio in 2025 would make almost £7,000 less by 2035, the researchers said.
A portfolio is considered more masculine if it aligns closely with the average investment habits of male fund managers, who tend to hold a larger share of stocks from the energy, financial and communications sectors compared to women.
The researchers said that masculine investment behaviour was “strongly correlated with lower performance”. Fund managers who “rely more on consumption-preferences take significantly less systematic risk and deliver lower returns”, they said.
Academics looked at consumer spending preferences for those in the highest income category, given that fund managers earn a median annual salary of $400,000 (£300,444), and found a “significant gender differences in consumption spending” and a “clear link” to investment portfolios in the US between 2004 and 2019.
Alexandra Niessen-Ruenzi, who helped compile the report, said: “The positive effect of portfolio femininity on returns is consistent with theoretical work.”
The study said the underperformance of “masculine” strategies was having a major impact on the economy, given that for more than two decades the percentage of female fund managers in the US has barely budged above 10pc.
Although the report was focused on US investors, the UK has also struggled with attracting more female fund managers. Only 20pc of funds in the UK have at least one woman manager, according to Morningstar.
The Treasury select committee last year said women in finance still faced workplace abuse and perceived the City to be a “man’s world”.
