The Financial Future is Female
Women are transforming financial markets and economies across the globe. Their risk tolerance, confidence, and willingness to invest will impact our world for years to come.
Aye M. Soe
Managing Director, Head of Research–the Americas at S&P Dow Jones Indices
The expression “The Future is Female,” captures the current zeitgeist around empowering and including women across every sector of our society. In many cases, such as politics and media, the future is now. However, when it comes to global markets and economies, the future for women is less certain.
S&P Global has written extensively (see Women were the Vital Statistic of the 2018 Midterm Election, The Key to Unlocking U.S. GDP Growth: Women, and Adding More Women To The U.S. Workforce Could Send Global Stock Markets Soaring) about the role of women in global markets and the economy.
But there’s one thing we had yet to do: ask women what they thought about their involvement in the market. This matters of course. According to the Boston Consulting Group, women are expected to hold $72 trillion in private wealth by 2020. Simply put, women are an ever-increasing market force as investors.
So, to understand the unique experiences and concerns of women, S&P Global, in partnership with SurveyMonkey, conducted an 11-country survey that examines aspects of financial preparedness, investment behaviors, and impressions of the stock market between women and men.
The results present a stark contrast between men and women on a variety of such issues, differences that serve to highlight the ways in which women are often less financially secure and less optimistic about their economic futures.
Understanding these differences – and what causes them – allows us to take practical steps toward inclusive economic growth that benefits everyone.
The United States is the world’s largest stock market and makes up more than half of the global market value.
The United Kingdom, Germany, Switzerland, Canada, Australia, France, Korea, China, India and Japan are the 10 next largest stock markets in size.
One thing these markets have in common is a quantifiable gender discrepancy, with men having a greater overall economic advantage over women. Asia represents a bright spot in this dim picture. Korean, Indian, and Chinese women are just as likely to feel prepared as their male counterparts. Switzerland, Australia, France, Germany, and the U.S. have the greatest gender discrepancy, where the share of women in bad financial shape are 10 to 18 points higher than men.
When it comes to deciding where to invest their money, across all countries surveyed, men and women alike care about a company’s environmental and social stance on key issues than those who don’t. However, the biggest gender disparity is in Canada where the double‐digit margins show 85 percent of Canadian women versus 66 percent of Canadian men see a company’s position on social issues an important factor when investing.
In top financial markets, are women living for the moment or planning for tomorrow when it comes to their finances? It’s time for a global financial reality check.
Women are More Wary of Markets
Head of U.S. Equities at S&P Dow Jones Indices
In both the U.S. and Canada, fewer shares of women feel they are in “excellent” or “good” financial shape than their male counterparts. If faced with a financial setback (like unemployment), 22 percent of American women say they would be immediately unable to afford their current lifestyle, nearly double the share of American men (13%).
This financial insecurity may be a key reason that only 26 percent of American women invest in the stock market, despite 41 percent of these same women viewing the market positively. Even if the market offers the potential for economic prosperity, women are generally in less of a secure position to take the risks associated with investing.
Despite similar sentiments about financial status, Canadian women were far more risk-tolerant than American women. North of the 49th parallel, 40% of women invest in the stock market. This investment advantage exists at all levels of education, even for women without college degrees. Over half of college-educated Canadian women invest in stocks or mutual funds, more than ten percentage points higher than the share of women who are college grads in the U.S. (42%).
Worries Weigh on Investment
Global Head of Analytics & Research
In the last decade, Europe has experienced a noticeable rise in populist attitudes. With financial crises and demographic changes causing significant uncertainty, fear has often manifested in backlashes against traditional governmental and financial institutions.
In the U.K., even amid tense negotiations over Brexit, few British feel overly concerned about their own finances. Just over a third of British women (36%) are worried about their financial future, similar to the shares of women in Germany (35%) and Switzerland (32%).
In a rebuke of populist attitudes, British women hold greater trust in traditional financial institutions than women in France, Switzerland, and Germany. Yet, that trust doesn’t necessarily translate into actual investment. Only around 20 percent of women in the four largest EU markets think it is a good time to invest.
Currently, France has taken up the populist mantle, particularly around financial and cost-of-living issues. According to the survey, almost 60 percent of French women surveyed were extremely or very worried about their personal financial futures.
China Stability Isn’t the Whole Story
Global Head of News and Research
The most populated region in the world, Asia is a mixed bag when it comes to economic outlook across the board. Among the Asian countries surveyed, perceptions about personal finances are worst for Korean and Japanese women. Financial preparedness is highest in China. Meanwhile in Japan, 87% of women consider themselves in poor shape financially, the most pessimistic outlook of countries surveyed.
Chinese women are most likely to think that it is a good time to invest in the market (44%), whereas only 21 percent of Korean women and 16 percent of their Japanese counterparts say it’s a good time to invest.
Throughout Asia, jobs and the economy are top of mind for women. Some 59 percent of Korean women rank “jobs and the economy” as their most pressing social issue. In Japan, 29 percent of women rank it as their top concern, nearly twice as much as the following two issues combined. In China, a third of women name it as their primary focus.
Of all the markets surveyed, Asian women are most likely to keep their finances separate from their partners. This independence speaks to the growing autonomy and power women hold in the marketplace.
Institutional Trust Sky High- Bucking Global Trends
Managing Director and Chief Executive Officer, CRISIL, S&P Global
Survey findings capture the opportunities and anxieties of India’s burgeoning middle-class. Across gender, there is comfort about the present with 92% of women and 88% of men rating their current financial situation as excellent-to-fair. That’s significantly more than the global average of 79%.
Also, bucking global trend, Indian women (71%) are almost as likely as Indian men (73%) to think now is a good time to invest in the stock market.
But the financial future is tense, with 83% of women and 87% of men fretting over it.With social security a national lacunae and lifespan increasing at a healthy clip, sustaining current lifestyles will require long-term job market and wage growth that would enable more planning for retirement.
This angst is reflected in the policy priorities of both men and women in India like their counterparts elsewhere: jobs, economy, education, healthcare, and retirement. Paradoxically, optimism and investment confidence are high, but their continuation is contingent on income security, which, in turn, is far from assured.
Small wonder, 32% of the respondents believe their financial well being depends on events mostly outside their control, such as economic development, the stock market, or an unexpected illness.
Read our full series of reports to learn about our research initiatives related to women around the world.