Investing in (and for) Women

A progress report on women, the economy, and corporate America

There is little doubt that women fueled much of the U.S. economy’s momentum last year. Taylor Swift’s record-breaking Eras Tour generated over $5bn to the economy; Greta Gerwig and Margot Robbie’s blockbuster ‘Barbie’ earned a long list of accolades: highest-grossing film of the year, highest-grossing movie directed by a woman ever, to name a couple.¹

Outside of setting pop culture records, women made a mark on economic headlines, too. They were a driving force behind last year’s labor market: their participation rate climbed above pre-pandemic highs, regaining all the jobs lost during COVID, and then some.²

The unemployment rate for women sits at a subdued 3.4% (its lowest level in the past three decades) as wages for women continue to climb.³ Data from the Bureau of Labor Statistics tells us that the wage gap between men and women declined over the course of 2023, now at its smallest annual average gap on record, but still a disappointing 84 cents on the dollar.⁴

The 2023 Women in the Workplace Survey, a comprehensive review of women in Corporate America, delivered encouraging news. Since 2015, the number of women in C-Suite positions has climbed from 17% to 28%, while representation of women across levels moved up in tandem (Figure 1).

However, companies led by female CEOs only represent 6% of the S&P500 by market cap.⁵ On the other hand, companies with female CFOs represent 29%. Under the hood, many of the female CFOs are concentrated in tech — in fact, most of the CFOs in the Magnificent 7 cohort are women!⁶

Women & investing: sizeable gains, but more work ahead

Let’s start with the good news: in 2021, Fidelity added 48% more new women customers compared to four years prior.⁷ Encouragingly, younger women lead the way, with the number of Gen Z investors doubling during that period.⁸

Despite the progress, the same report finds that only a third of women see themselves as investors. Why is this important? Time away from markets, higher retirement income needs, and the pay gap help form a larger wealth gap. Investing is the best tool in combating this inequality. Women tend to save or invest more conservatively than men — a huge drag over the last few decades as stocks handily outperformed cash (Figure 2).⁹

Why might some women hold back from investing? A lack of representation could be one perceived barrier, as the industry remains largely dominated by men. Women are also less comfortable discussing their financial health compared to men, according to a recent Wells Fargo study.¹⁰

Here’s the kicker — a plethora of data shows that when women do invest, they tend to outperform. A Fidelity paper scoured 5 million customers over a ten year period, and found that on average, women narrowly edged out their male counterparts.¹¹

What can you do to invest in and for yourself:

1. Find and follow women in finance on social media to help you start your investing journey and keep you on track.
2. Help others around you by having open and honest conversations about money and investing.
3. Take control of your financial future — you are your best investment.

For those who are just getting started, or want to take the guess work out of investing, target date ETFs make it easy to navigate towards retirement. Just select the fund nearest your ‘target date’ — the year you plan to retire. The LifePath Investments team handles adjusting the mix of stocks and bonds as the date approaches, fully automated.