There is no lack of studies showing that women investors consistently outperform their male counterparts. It is hardly surprising, as, on average, they tend to spend longer researching their investment choices and are more likely to take on appropriate levels of risk than men.
And yet the investment gender gap persists. Recent research suggests that women of all ages and nationalities are still hesitant to put their own money to work, let alone take care of other people’s savings.
An increasing number of women investors do, however, boldly break the stereotypes, joining the ranks of portfolio managers, asset allocators, investment analysts and venture capitalists. To celebrate these modern-day heroines and role models, NordSIP decided to dedicate this year’s International Women’s Day feature to them. We reached out to a selected number of professional female investors in the Nordics to learn what compelled them personally to start managing money. We discuss the qualities that make a good investor in general and touch upon the somewhat controversial topic of what, if anything, is unique about a female investment style. Finally, we search for ideas on how to encourage more women to become professional investors.
Growing up with an investor’s mindset
“I was nine-years-old, with my pocket money saved up,” recalls Guðrún Inga Ingólfsdóttir, Chief Investment Officer of Lifsverk Pension Fund in Iceland. It was in the early eighties, and the young saver had done her homework carefully, comparing different savings opportunities available in Iceland. “Government bonds offered a better yield than a savings account, so I went to the bank and bought one government bond.” It was a beginning. When Ingólfsdóttir became a teenager, she moved on to investing in equities.
Her story is echoed by Claudia Stanghellini, Head of External Management at AP3, who was introduced to saving by her mother and grandmother at an early age. “I still remember going to the bank with my mom every quarter to physically deposit my tiny savings,” she recalls. “When I was 18, I opened a depo and started investing in bonds and funds. I guess that was my first step into investing,” she says.
Family does seem to play an important role when choosing an investment career. “I grew up in a family where discussions on stocks and investing were lively,” shares Annika Ekman, Head of Direct Equity Investments at Ilmarinen. “Choosing economics and finance was, I guess, a logical continuation.”
Many women investors also quote school as a place where their interest in investing was first kindled and nurtured. “It was a high passion for math in primary and high school that led me to study maths and economics at university,” says Pernille Jessen, PhD, Head of Fixed Income & Credit at MP Investment Management. A combined interest in mathematics and stocks was also what led Jessen’s colleague, Louise Jørring Gev, to her current position as Head of Equity at MP Investment Management. “Math and numbers have always been my strong side, and I had a childhood fascination with the stock market,” she says.
A positive early working experience got other women hooked on their career paths. “My interest for professional investing was awakened when working as an analyst, sitting close to the portfolio managers,” says Annika Otz, Chief Investment Officer at Nordea Life & Pensions, Sweden.
For Karin Göransson, Senior Portfolio Manager at Handelsbanken Investment Management, it was an intense curiosity for professional investing that pulled her over from the investment banking side, where she had worked for many years. Yue Gong, Head of Analysis at AP6, can relate to that. “I embarked on investing professionally after a three-year stint in investment banking,” recalls Gong. “I was attracted by the momentum demonstrated by the industry, and I have come to appreciate immensely the change of mindset at work as I switched from the sell-side to the buy-side,” she adds.
Finding the right path and sticking to it
Whatever the reasons for choosing their professional path, whether a single-minded resolve since childhood or a lucky coincidence in their early career, all these women decided to stay in the fascinating world of investing. Kerstin Cooley, Managing Partner at Brightly Ventures, says serendipity propelled her into investing. Staying on, however, is a matter of choice. “I think it is easy when you find something that you really enjoy doing, it doesn’t feel like a job anymore but something you want to engage your time in,” says Cooley.
Ingólfsdóttir recalls meeting a senior asset manager on a field trip during her graduate studies in the USA. His description of asset management as a field that combines keeping an eye on different aspects of the economy, yet without the long days of investment banking, made quite an impression. “I thought this sounded like the perfect job,” she says. She has worked for three different pension funds in Iceland since, and she hasn’t changed her mind. “It gives me great pride to invest on behalf of regular people, sometimes their entire retirement savings, and I take my job seriously,” she shares.
“I enjoy the daily challenges and continuous learning experience that comes with investing in equities,” says Jørring Gev. Jessen’s fascination with investing has not subsided over the years either. Propelled by her love for math, she feels she has found the best place to be. “Within this cross-field, applied math is essential, and lots of data is available for testing theories. To me, this is ideal: a quant toolbox and the entire world of economics trying to map out how the world works,” she exclaims.
Identifying what it takes
Whether male or female, certain traits are essential for any successful professional investor. “I think it is important that you enjoy and master the challenge to sift through and prioritise, evaluate and concentrate your efforts in the face of huge amounts of information,” says Jørring Gev. “Additionally, you should be comfortable, objective, and calm when dealing with volatility, gains, and losses. You also should be confident enough to handle making lots of mistakes and humble enough to learn from them,” she concludes.
“Being calm and always remembering the long-term goals” are the qualities that distinguish a good investor, according to Ingólfsdóttir. Göransson’s advice, meanwhile, is to be “curious, responsive, analytical and a little stress-resistant.” Or “critical and inquisitive at the same time,” as Gong puts it.
Combining quantitative skills with qualitative judgement is also a must, according to Stanghellini, and Ekman agrees: “It is essential to understand numbers, forecasts, and valuation. And rely on your own thinking, not just third-party recommendations,” she adds.
Investing like a woman
Asked to reflect on what makes their female investment style special, most of the senior female investors interviewed feel reluctant to fall into any gender stereotypes. According to them, it is difficult to generalise, as everyone is unique. “I do not think investment style is a gender question,” states Ekman plainly. “I think we are all struggling with the same challenges,” adds Göransson, suggesting that all investors are equal in the eyes of the market.
That said, not all investors are equally equipped, and gender may be just one of many factors that ultimately drives an individual’s investment decisions. “All life experiences influence you. I am female, so I am influenced by that when investing but also by many other factors,” says Ingólfsdóttir. “I think it is important that we are aware of the biases we may have when investing, to keep them as much out of the equation as possible,” she adds. Cooley agrees with her. “I think men and women have different glasses on and that unconscious biases play a big part in the selection process,” she says.
“I do observe that in many cases, female investors tend to debate with themselves a lot before they present any new investment idea to a wider group,” Gong points out. “It might take longer for them to get excited about a new idea. Their conviction usually comes with a lot of groundwork over an extended period,” she adds.
Jessen takes up the important if often overstated and misinterpreted gender aspect of risk-taking. “If I were to point to a high-level difference, not just within investing, risk aversion seems to be differently tuned for women than men, where men biologically have been primed to be more comfortable with risk-taking,” she says. “This could be part of why there are fewer women than men in the investment profession,” speculates Jessen.
Reflecting upon her own experience, without generalising gender differences, Stanghellini says she suspects that her investment style probably does differ from that of male investors around her. “I tend to be quite long-term when selecting managers and external strategies for my portfolio,” she says. “This means having more patience in drawdown situations, trying not to panic, not to sell.”
When picking stocks, Jørring Gev also focuses the company’s long-term characteristics. She has a strong focus on risk management and is a patient investor. Moreover, she doesn’t mind holding a contrarian view. “My investment style holds a number of traits that are often ascribed to female investors, but I know men who invest using some of the same elements,” she comments.
Young female investors wanted!
So, what can we do to attract more women, especially young ones, to become professional investors? “You are already doing it,” replies Gong. “By putting women who invest in the spotlight, you are showing other women examples, which can inspire them to explore the possibility of becoming one themselves.”
“Working in asset management is incredibly exciting, yet many young women do not understand it,” laments Göransson. “We need to become better at communicating what we do and encourage more young people,” she says.
Stanghellini, who is also Chairwoman of KvinnoKapital, the Swedish professional network for women in asset management, lifts the importance of strengthening the connections between those already in the field. “It is key to support each other, inspire each other and create opportunities,” she points out.
Meanwhile, Jessen reflects on the fundamental reasons for choosing this career path. “Investing and allocating capital is a vital part of a well-functioning society, but the financial world has had a hard time in the public eye ever since the global financial crisis,” she says. “I think we need to be better at showing that you can make a difference for many people when working as a professional investor,” she adds.
“As parents, we need to encourage financial literacy, responsibility, and independence for all our children, boys and girls alike,” says Jørring Gev. “The educational system and media should bury the stereotypical male investor and cater to a broader audience. And we need more female role models – some of us think investing is FUN!”
Jørring Gev is far from alone in mentioning the importance of role models. “We women within the investment space need to act as role models and support other women,” Otz adds, capturing the common sentiment. “I believe that initiatives like the NordSIP 8/3 feature can be an important inspiration for other women interested in becoming professional investors and encouraging them to step into the investment space,” she concludes.
Let us hope she is right.