Jonathan Bell Lovelace believed that fundamental research is essential to achieving superior long-term investment results. The small company he founded in 1931 has grown into one of the world’s most respected financial institutions.
Capital Group’s Wisdom of Experience survey finds that women investors:
LOS ANGELES, October 17, 2017 — Women investors are highly engaged in financial decisions, contribute meaningfully to household income and assets, and expect their investments to work hard for them, according to a survey of 1,200 investors conducted by Capital Group, home of the American Funds®. Despite this, 81% of women investors say they have personally experienced negative stereotypes regarding finances, including their investing acumen, income, role in making financial decisions and appetite for risk.
“American women are a powerful economic force with $11 trillion of assets,” said Heather Lord, senior vice president and head of strategy and innovation at Capital Group. “Women are a complex and varied group of investors, and they have a clear vision for their investing goals. They want enough money to retire and to take care of children or aging family members. They want investments that outpace the market over time and show resilience in market downturns. And more than men, women want to invest in companies that are not only financially successful but also deliver economic and social benefits.”
Women Are Confident About Their Financial Contributions, Investing Decisions and Power as Investors
More than half (53%) of the women surveyed rate themselves as meaningful contributors to their household income and assets, and 52% say they are always or usually confident they have the knowledge to make good financial and investment decisions. Half of Baby Boomer (50%) and Generation X (48%) women investors say their top priority outcome is to beat the stock market over time, while for 51% of Millennial women it’s to grow their investments in line with the market. As a group, women believe they have more economic power as investors than in the workplace: nearly half (48%) say that women have a great deal of economic power as investors, while only 35% believe they have as much power in relation to wages in the workplace.
Women Have High Expectations for Financial Performance and Giving Back to Country and Community
Nine out of 10 women (94%) and men (90%) want the companies they invest in to deliver strong financial performance in terms of revenues, earnings and dividends per share growth. By a margin of nine percentage points over men, women investors think it’s important for companies they invest in to focus on growing U.S. jobs, operations and exports. Women are also somewhat more likely than men to invest in companies that support new technologies and innovation-led growth. They expect companies to promote health and wellness of consumers; help disadvantaged communities; and promote economic opportunity for women, minorities and LGBT persons by approximately 15 percentage points more than men. Women are also 22 percentage points more likely than men to emphasize the importance of investing in companies that put women in senior management and board roles (73% women versus 51% men).
Women Investors Are Comfortable Taking Risks but Still Monitor the Downside
One of the most common stereotypes women investors face is low appetite for appropriate investment risk, but their investment preferences suggest otherwise. When asked about the investment approach that best aligns with their retirement savings objectives, only one out of 10 women (11%) chose the most conservative option: bank CDs and high-quality bonds with little or no money invested in the stock market.
In contrast, the top choice overall for about one in three women (30%) and men (33%) was a mutual fund with a track record of outpacing the stock market over the long term. However, women investors do not ignore the concern for market downturns. Nearly one in four women (24%) investors surveyed voiced their highest preference for mutual funds that do better than the stock market during downturns, compared to 19% of men, indicating a somewhat higher interest in downside protection on the part of women.
Confidence for Retirement Security Varies by Generation but Is at Its Lowest Among Generation X
Of the generations surveyed, Millennials are most confident about investing and started earliest: 63% of Millennial women say they began to care about money and investing in their 20s; however, only 28% of Gen Xers and 16% of Baby Boomers say they focused on financial decisions and investments in their 20s. Millennial women across all races, as well as all three generations of African-American and Hispanic women, are much more likely than other groups to have concerns about paying for their children’s education and taking care of aging parents. In addition, 57% of Millennial women are concerned about having enough money to retire with peace of mind.
Generation X is the most anxious about retirement by far, having weathered the collapse of the dot-com bubble in the early 2000s and the 2008 financial meltdown, as well as sluggish wage growth during their formative adult years. Two-thirds of Gen X women (66%) say that not having enough money to retire keeps them up at night. Conversely, Baby Boomer women are the least worried about money in retirement (51%) and three in 10 (31%) say that nothing related to finances keeps them up at night. Boomer women are also most focused on reducing their losses during periods of market downturns, compared to Millennials and Gen Xers, given the need to preserve capital and generate income when they are closer to retirement age.
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About Capital Group
Since 1931, Capital Group, home of the American Funds, has been singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research and individual accountability. Today, Capital Group manages more than $1.4 trillion in equity and fixed income assets for millions of individual and institutional investors around the world.*
The Capital Group companies manage equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.
*As of December 31, 2016
The survey was conducted by APCO Insight, a global opinion research firm, in March 2017. The research consisted of an online quantitative survey of 1,200 American adults — 400 Millennials (ages 21–37), 400 Generation Xers (ages 38–52) and 400 Baby Boomers (ages 53–71) — of varying income levels, who have investment assets and also who have some responsibility for making investment decisions for their families. This sample reflects national representation on key demographic measures according to the U.S. Census Bureau.
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Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses or the collective investment trust's Characteristics statement, which can be obtained from a financial professional, Capital or your relationship manager, and should be read carefully before investing.
Securities offered through American Funds Distributors, Inc.