Women come out on top in the battle of the sexes for super

Super funds are, however, performing better than their ASX 200 counterparts when it comes to female representation on their boards. The Australian Institute of Company Directors (AICD) has set a 30% target for the percentage of females on ASX 200 boards. To date, only 96 companies have achieved this target. In total 29.5% of people on ASX 200 boards are women. Across the All Ordinaries, this figure is 22.7%.

Research by the Australian Prudential Regulation Authority (APRA) paints a similar picture. Its figures show there are twice as many male as female directors. But the figures are improving. In June 2015, 72.4% of directors were male. By June 2018 that had dropped to 67.1% 

Source: APRA

Note: At the end of the article we have also listed the super funds with the highest and lowest percentage of female directors, plus the female/male director ratio for the top 20 largest super funds, as reported to APRA at June 2018.

Female representation on boards isn’t the only variable linked to gender when it comes to super investing. Related research conducted in the US by Fidelity Investments has found women are better investors than men, saving 0.4% more and achieving 0.4% higher returns.

While these percentages may not sound like much, they have a substantial impact over time. The research showed over the course of a lifetime, a 22-year-old female earning $50,000 a year would be better off by $250,000 at the end of their life.

This flies in the face of public perception. The same piece of research only found 9% of respondents think women are better investors than men. But research does not back this up, in fact there is evidence to suggest women are better investors than men.

One reason for this is because women take fewer risks, for instance they don’t invest as much in shares as men do. They also trade shares less than their male counterparts, with males 35% more likely to trade shares, with brokerage and fees eroding returns.

Neil Stewart, Professor of Behavioural Science from the Warwick Business School at the UK’s University of Warwick, has conducted studies that reinforce these findings. His research shows women typically don’t invest in more speculative, lower-priced shares. They are also less inclined to sell winners and hold onto losers, which also drags down returns.

Back home, financial advisers observes somewhat different trends. “My experience is that there’s a much higher level of awareness about superannuation as an investment for women. When a couple is planning to start a family, and the mother expects to be the primary carer for the children, she already knows that periods of unpaid maternity leave and working part-time have an impact on her super in the long run,” says Michael Miller, a certified financial planner and principal of MLC Advice Canberra.

This gap is material – according to Women in Super’s figures, at the moment Australian women retire with 47% less superannuation than males – although they live on average five years longer.

Miller concurs it is often perceived men are more comfortable with risk in their investments than women. But he says this is becoming less common with younger women investing in their super. “There is a much higher level of understanding in the community that superannuation is for retirement which is a long time away. So women are starting to appreciate they have the capacity to take on higher risk in these investments knowing they have a very long time before the money is needed for retirement.”

He says this is a positive development because super investors with a higher allocation to growth assets such as shares and property that can go both up and down in value substantially are more likely to be exposed to higher long-term returns than investors with a lower risk appetite.

“If there are gaps in contributions because there has been a juggle between raising a family and paid employment, that growth is all the more important.”

Miller says when looking at more imminent retirement planning for women there can be a tendency towards more defensive assets, that have lower rates of growth but also don’t vary as much in their value.

“This can be quite sensible though when retirement isn’t far away, and it could be driven as much by the closeness of retirement rather than any difference between women and men.”

While there is still some way to go before women achieve parity when it comes to board representation and also in addressing the super gap, at least steps are being taken to bring this issue to light and to achieve a more equitable future.  

Super funds with the highest percentage of female board members

Source: APRA

Super funds with lowest percentage of female board members

Source: APRA

Female/male director ratio for Top 20 super funds

Note: Top 20 in terms of number of members, ranked by highest percentage of female directors

Source: APRA