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Gender difference in equity portfolio diversification

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  • Wu, Zheng
  • Westerholm, P. Joakim

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.

Suggested Citation

  • Wu, Zheng & Westerholm, P. Joakim, 2024. "Gender difference in equity portfolio diversification," Pacific-Basin Finance Journal, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:pacfin:v:88:y:2024:i:c:s0927538x24003214
    DOI: 10.1016/j.pacfin.2024.102569
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    More about this item

    Keywords

    Portfolio diversification; Genders; Portfolio performance;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance

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