Few likely consider gender differences and attitudes towards alternative investments. However, earlier this year MainStay Investments, the mutual fund distribution arm of New York Life Investment Management LLC published a study looking at high net worth (HNW) individuals and their investment decisions. While women are traditionally considered more conservative investors than men[i], the study reveals a potential shift in favour of alternative investments.

HNWI Survey

According to the study, HNW women allocate 27% of their assets to non-traditional investments, with men at only 20%. Interestingly, 55% of the HNW women surveyed increased their alternative investment allocation in the past year. For these HNW women surveyed, 89% of those with positive alternative investment experiences would recommend them to fellow investors.

One HNW woman in particular, City Superwomen Nicola Horlick, revealed at Intelligent Partnership’s 2013 Alternative Investment Summit that she allocates 100% of her portfolio to alternative investments. Leading HNW women in the industry and financial intermediaries play a key role in encouraging other HNW individuals to enter the alternative investments landscape.

Women, Investments, and Advisers

This new potential shift in allocations to alternative investments among women is not necessarily because they are less conservative, but because HNW women extensively research investment options and create specific investment goals[ii]. Whether investing with an advisor or alone, women better understand and evaluate alternative investments before making an investment decision.

By setting goals and dedicating time to due diligence women are able to understand the benefits of including alternatives in a well-balanced portfolio. Alternative investments provide portfolio diversification, a hedge against inflation, and additional sources of returns. Understanding these benefits is perhaps why women are shifting their investment attention to the alternatives market.

Survey Considerations

One particular limitation to the study is demographics. All HNW investors surveyed by MainStay were all U.S. residents between ages 40 to 65. By including only US investors the survey does not represent the portfolio allocations of UK or other global investors. It would be interesting to see if survey demographics influenced the findings or if perhaps the results would be similar if UK HNWI were surveyed.

More Resources for Women Investing

Interestingly, there are also various resources that help women learn more about alternative products. The 6th annual Women’s Alternative Investment Summit takes place this November in New York City for HNW women interested in private equity, venture capital, and alternative investments.  Women can also join the Association of Women in Alternative Investing for networking and education in alternative investments.

The Future of Alternatives

While it is uncertain what exact factors are leading women to navigate the alternative investments landscape, it is a change definitely worth watching. Interestingly, while women are more eager to invest in alternative investments, MainStay found that both men and women expect alternatives to become a core investment holding in their portfolios over the next 5-10 years. This key insight suggests that alternatives are slowly entering the scope of mainstream investments as more investors look to diversify their portfolios.

Access the survey here


[i]Various academic studies and industry surveys (i.e. Dwyer et al., 2002, Sundén & Surette, 1998, and BCG) find that women are traditionally considered more conservative investors than men.

[ii]Various industry provider surveys (i.e. MainStay, Prudential, and BCG) found that women do extensive research and set specific goals before investing.

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