Wealth as a moderating effect on gender differences in portfolio holdings

Using a unique data set of 6556 investment advisory clients at a large European wealth management institution we reveal how wealth trumps gender in determining the investment risk taking behaviour of women. While overall the advisory portfolios held by women contain less equity exposure and therefore have lower risk and return profiles than those held by men, this effect is attenuated when controlling for portfolio size. The portfolios of women with less than EUR200,000 invested contain higher equity allocations, i.e., more risk, and achieve greater returns, but they do not incur higher advisory fees compared to women with larger portfolios. These results confirm the moderating effect of wealth on gender. Furthermore, across both genders these smaller investors absorb more risk and have higher returning portfolios than investors with larger portfolios. Contributing to research on the role of gender in financial advice and investment decision making, our results are relevant to financial advisors and their clients.