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SMSFundamentals: Women Do It Better

SMSFundamentals | Apr 21 2023

SMSFundamentals is an ongoing feature series dedicated to providing SMSF trustees with valuable news, investment ideas and services, in line with SMSF requirements and obligations.

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SMS Fundamentals: Women Do It Better

Research shows women are continuing to close the superannuation gap with men and it may just be good for the economy.

-Roy Morgan research shows women are closing the super gap with men
-47% of SMSF members are female
-In Australia, female led funds outperform male-led funds
-US studies show women outperform male investors generally
-Feminisation of poverty is a social and economic problem for Australia
-Closing the pay and super gap may provide a solution and fire GDP

By Sarah Mills

Female investors and SMSF managers take heart!

Recent research from Roy Morgan shows that women have been closing the superannuation gap with men, in terms of both average balances and ownership levels.

The research examines average super balances for men and women between 2012 and 2022, and finds balances for women rose 38% during that period to $154,000, compared with males, whose balances grew 26% to $216,000.

How much of this can be attributed to gun female SMSF managers or not, the research does not say. 

But the assertion may not be as flippant as it sounds, given a multitude of studies suggest female investors consistently outperform male investors (discussed below).

Female SMSF Members 47% Of Total

Australian Tax Office Figures show that, as at June 30, 2021, there were 1.114m SMSF members, of whom 47% were female.

As at June 2022, SMSFs accounted for $868.7bn in assets or about 26% of the $3.3trn invested in superannuation, advises Super Guide.

Feminisation Of Poverty Weighing On Australia

The feminisation of poverty has become a major social and economic problem for Australia as the baby boomers age and real-estate prices and rents rise, forcing many over-50 year-old women onto the streets and into destitution.

This imposes high, unnecessary costs on the social services system, particularly given many of these women are still able to contribute productively to society.

The government has indicated it is preparing to address many of the structural impediments for women to building superannuation, and other structural inequalities to address the overall contributors to the impoverishment of women. 

Depending on the integrity of government reforms, this should result in a further evening of the superannuation playing field, resulting in more money flowing into the coffers of women generally.

Women In Super is calling on governments to pay an extra $1,000 for women and other low-income earners into their superannuation accounts, and to remove the $450 monthly pay threshold.

Disparity Remains

Roy Morgan chief executive Officer Michele Levine observes there is plenty of room to improve the super gap.

“Women in Australia continue to retire with far less superannuation than their male counterparts, even though the longer life expectancy at birth for women in Australia is more than four years higher than for men,” says Levine.

Roy Morgan’s findings are replicated in studies globally.

In total, Australian women own $1.2trn of super funds under manager (FUM) and, while accounting for 53% of retirees, only own 44% of retiree super FUM, says Rainmaker.

Of course, this all links back to the gender pay gap, and interrupted work arising from child bearing and raising, and it will be interesting to see the commitment of big capital to closing this as part of the ESG agenda.

Getting down to the nitty gritty of the Roy Morgan report, females held an average super balance in 2012 of $111,000 – roughly 64.7% of the average male superannuation balance of $172,000.

All up, the average super balance for women rose from 64.7% of the male average to 71.2%.

According to, women own -3.1% less of housing stock than men. 

Female Investors Generally Outperform Male Investors

Many studies have shown that female investors outperform their male counterparts, while generally assuming less risk. This is despite generally scoring less admirably on investment knowledge.

The Superannuation Benchmarking Report from Rainmaker, based on a survey of 50 superannuation funds, found that women only held about a third of leadership positions but that those funds with a higher proportion of women in top jobs outperformed their male-led peers by about 0.3% a year.

“While 0.3% doesn’t sound much, if you’re a member of a women-led fund, you have a three-in-four chance of outperforming,” advises the company.

So it is not unreasonable to assume that female-managed SMSFs also stage respectable performances.

This situation is replicated globally.

According to Fidelity Investments’ 2021 Women and Investing Study of 5m Fidelity customers over 10 years, women investors broadly outperformed men by 0.4% to 1%. 

Fidelity also found that two thirds of women invest outside of their retirement plans.

Women were also opening brokerage and retirement accounts at younger ages starting at an average of 21 for 18-35 year-olds, compared with an average of 30 for over-36 year olds.

Fidelity also found women save more money than men – almost 1% annually. Which, on a level playing field, equates to about $316,000, over a lifetime, starting with $50,000 and adding $10,000 every year.

One assumes that might have reasonable affects on GDP over a period of time, assuming a good percentage of investments are allocated to more successful and in some cases more productive assets.

There doesn’t appear to be much research on this but one suspects big capital would like women to release some of their cash reserves to fire the transition.

Studies show more than half of US women keep US$20,000 or more in savings accounts on top of emergency reserves, and large numbers hold cash in excess of US$50,000 or US$100,000.

The release of these funds into the economy is likely to be encouraged, and the CFA Institute has forecast that by 2025 there won’t be a statistically significant pay gap in stock market participation in the US.

Why Are Women Outperforming Men?

The reasons for the women’s superior investment performance are likely multitude.

Prime Financial observes women make more non-concessional contributions than men, possibly as a result of balance-equalisation strategies, wherein one member of a relationship, typically with a higher balance, will direct some of that to their partner by way of a re-contribution (70% of SMSFs consist of two members).

Women also tend to contribute more towards their concessional cap.

Many studies also find female investors typically adopt a more cautious stance, investing primarily in cash and real estate, with longer-term horizons, adopting more buy and hold strategies.

But it seems fair to draw one conclusion – a higher superannuation balance, and a fairer pay distribution would go a long way to solving the feminisation of poverty in Australia, reducing the burden on government while potentially boosting economic growth.

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