Gender difference in equity portfolio diversification

Zheng Wu and P. Joakim Westerholm

Pacific-Basin Finance Journal, 2024, vol. 88, issue C

Abstract: This study provides compelling evidence that individual investors consistently maintain under-diversified portfolios, with female investors exhibiting significantly lower levels of diversification than their male counterparts. Analyzing a comprehensive dataset of retail investor trades, this study provides the first detailed examination of gender differences in trading activity, performance, and portfolio diversification. Performance, and diversification are systematically related to investor characteristics such as portfolio size, income, education, language, age, and investment experience. The result that increasing diversification improves performance for all investors corresponds with the fact that female investors are found to diversify less at the same time as they show a slightly lower aggregated performance than male investors.

Keywords: Portfolio diversification; Genders; Portfolio performance (search for similar items in EconPapers)
JEL-codes: G3 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:88:y:2024:i:c:s0927538x24003214

DOI: 10.1016/j.pacfin.2024.102569

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