The Warwick study, which tracked the performance of 2,800 investors over three years using Barclays' Smart Investor service, found that women outperform men by a significant 1.8 percent on the The Financial Times Stock Exchange 100 Index (FTSE 100).
The study, led by Neil Stewart, a professor of behavioral science at Warwick Business School, evaluated multiple criteria including the type of investments held, age, trading frequency and sum of money invested, according to a university news release.
While women traded an average of nine times a year compared to 13 for men, the most striking difference was the different types of stocks men and women preferred to invest in. Female investors were found to be less likely to invest in speculative, lower priced shares types of stocks, unlike men.
"The tendencies displayed by people, such as investing in more speculative stocks and not wanting to let go of shares showing a loss, are no real surprise," Stewart said, according to the news release.
"If you have ever watched a bad movie to the end, you are having trouble letting go of a loss. If you have ever bought a lottery ticket, you have been attracted to big wins, but wins that are very unlikely," Stewart noted.
"Men are just a little more likely to be drawn to more speculative stocks whereas women are more likely to focus on shares that already have a good track record. Women also take a more long-term perspective, trading less frequently. This possibly means women are investing more to support their financial goals, whereas men are attracted to what they see as the thrill of investing," he added.
In addition, Clare Francis, a director for savings and investments at Barclays Smart Investor, added that taking a more long-term view about what to invest in may be more beneficial.
"The stock market is often portrayed as a high energy, risky environment, but this analysis shows that taking a more long-term view about what to invest in, rather than picking eye-catching and potentially more volatile shares, is actually likely to provide a better return on your money," she explained.
"The research shows that you really don't have to be a stock market genius to invest. Opting for funds, rather than individual shares, can help reduce the overall risk and over time, hopefully result in good returns that will be better than you'd have achieved if you'd kept all of your money in cash, albeit that cash provides certainty. It cannot fall in nominal value," she added, according to the news release.
