Gender and Investing: Let s Set the Record Straight Do male or female investors earn higher returns? Are men or women more optimistic about 2015? Which stocks and brokerages do they prefer? Where are women millionaires most likely to live? All data in this report is aggregated and anonymized from investors who sync and track their portfolios with SigFig. Learn more at www.sigfig.com or email insights@sigfig.com. 1
investors beat men by 12%. 4.7% 2014 Median Net Returns 4.7% 4.1% +12% 0.0% 5.7% With $100,000 to invest 5.1% and assuming this performance trend continued for 30 years, a woman would earn $58,000 more than a man. also beat men on a risk-adjusted basis as the median female portfolio has 74% in equities vs 75% for men. Anonymized data from investors who track their portfolios with SigFig. Returns are net of fees and include dividends. Time period of analysis is 12 months ending 1/2/2015. 2
were also 25% more likely than women to lose money in the market. 2014 Net Returns 20.4% 64.6% 14.9% 25.8% 58.5% 15.7% 0% 100% Lost Money Below S&P500, but didn t lose money Beat S&P500 Anonymized data from investors who track their portfolios with SigFig. Returns are net of fees and include dividends. Time period of analysis is 12 months ending 1/2/2015. 3
How? One possible cause is higher portfolio turnover. churn their portfolios 50% more than women. 14.0% 2014 Median Portfolio Turnover 14% 9% In 2014, frequent traders investors who have annual portfolio turnover of 100% or more had median net returns of just 0.1%, compared with 4.7% for everyone else. 0.0% Anonymized data from investors who track their portfolios with SigFig. Returns are net of fees and include dividends. Time period of analysis is 12 months ending 1/2/2015. 4
In fact, men are more likely than women to have brokerages that end with trade. 1.2x 1.1x 1x More Likely 1.1x 1.2x More Likely Etrade Ameritrade Fidelity Anonymized data from investors who track their portfolios with SigFig. Selected institutions only. More data available upon request. 5
Despite this, men are 1.5X more confident that they will beat the market in 2015. 11% Expect to do better than the market 15% of women actually outperformed the S&P 500 in 2014 17% Expect to do better than the market 16% of men actually outperformed the S&P 500 in 2014 89% 83% Expect to do worse or as well as the market Expect to do worse or as well as the market 2015 Sentiment Survey data conducted with 800 randomly sampled investors nationwide. 6
and men tend to gravitate towards certain stocks but not always in ways we expect. 1.4x 1.3x 1.2x 1.1x 1x More Likely 1.1x 1.2x 1.3x 1.4x More Likely Tesla Amazon Anonymized data from investors who track their portfolios with SigFig. Each stock has at least 500 investors represented. Selected tickers only. More data available upon request. 7
millionaires are 70% more likely to live in New York vs California. In California, women are 1/3 less likely to be millionaires than men. 47% 31% In New York, women are 1/3 more likely to be millionaires than men. CA NY % Female investors who are millionaires 10% 17% % Male investors who are millionaires 15% 13% Anonymized data from investors who track their portfolios with SigFig. Sample size is 4,000 investors from CA and NY who use the SigFig portfolio tracker. Selected states shown. More data available upon request. 8
For both women and men, fund expense ratios were negatively correlated with returns in 2014. 7% 2014 Median Returns vs Expenses Median Annual Returns 0% 0.5% 1.0% 1.5% 2.0% Fund Expense Ratio Bucket Anonymized data from investors who track their portfolios with SigFig. Fund expense ratios are for ETFs and Mutual Funds in 2014. 9
tend to own more expensive funds than men. Older investors pay much more in fund expenses than younger investors. Median Fund Expense Ratio 0.8% 0.6% 0.4% 0.2% Median Fund Expense Ratio by Age Group Retirees pay more than 2X in fund expenses compared to Millennials. If they paid at the same rate, the median retiree would save $900 a year. 0% 30 40 50 60 70 80 Investor Age Anonymized data from investors who track their portfolios with SigFig. Fund expense ratios are for ETFs and Mutual Funds in 2014. $900 comes from paying 0.28% instead of 0.59% on $300,000 in fund holdings, which is the median for investors in the over-55 age bracket. 10
tend to invest more aggressively than women but not late in life. 90% Median % Portfolio in Equities by Age Group % of Portfolio in Equities 60% 30 40 50 60 70 80 Investor Age The average 25-year old woman invests like a 35-year old man. The average 55-year old man invests like a 65-year old woman. Anonymized data from investors who track their portfolios with SigFig. Equities include US, Developed, and Emerging Countries stocks. 11
About SigFig SigFig is the largest portfolio optimization platform in the world helping everyday investors track over $350B in assets. Through partnerships with Fidelity, Schwab, and Ameritrade, we analyze, monitor and improve your portfolio, or help build a new one. Using advanced algorithmic strategies, SigFig automatically balances and diversifies your investments, while reducing risk and minimizing fees. About this Report The analysis in this report is based on data aggregated and anonymized from investors who have synced their investment accounts on SigFig. Technical details are available upon request. Contact Information For more information, email insights@sigfig.com or call (415) 558-9611 Disclaimers Past returns reflect performance of assets over the course of one calendar year from 1/3/2014 to 1/2/2015 unless otherwise noted. Data is based on aggregated anonymized data representing SigFig users unless otherwise noted. Results are net of all management fees and expenses unless otherwise noted. Performance data includes reinvestment of dividends and interest unless otherwise noted. 12