Moving away from saving accounts, Into the Markets: Why Women Should Invest

Chris Hofmann is an investment expert at the ETF provider Vanguard, where she leads the Intermediated Wholesale business for Germany and Austria. She observes that women invest significantly less in equity ETFs than men and wants to encourage women to manage their own finances prudently and profitably. Naturally, we asked her to write a guest article for us at Fondsfrauen on this topic.

Between Comfort Zone and Returns: The Reality of Female Investors in Germany
Despite rising interest rates, the savings account remains the most popular investment product among Germans. According to Statista, around 42 percent owned a savings account in 2023—far more than stocks or investment funds, which only rank third among preferred investment options. Home savings contracts also continue to be more popular than stocks. However, this preference for seemingly safe investments comes at a price: missed return opportunities.

Women, in particular, tend to hold back when it comes to risk-bearing investments. A recent EY study shows: only 15 percent of women in Germany invest in individual stocks, compared to 34 percent of men. The picture is similar for ETFs: 19 percent of women invest in index funds, while 36 percent of men do. Statista data from 2024 confirms this trend: only 12.3 percent of women hold stocks, funds, or ETFs, compared to 22.2 percent of men.

Fear of Risk: An Obstacle with Consequences
Many female investors miss out on returns because they are reluctant to let go of their savings accounts. Yet, long-term investments in the stock market are a good way to build wealth. Even though markets fluctuate, investments in broadly diversified products like ETFs can pay off in the long run. Savings plans, in particular, offer a systematic way to get started - without the frustration of market timing.

Of course, individual risk tolerance plays a role. But there are solutions for that too. Multi-asset ETFs, for example, combine stocks and bonds in a single product, offering a balanced mix of returns and security. This can be a sensible entry point, especially for women who want to consciously manage their risk.

Simple Investment Principles: Guidance for Smart Financial Decisions
Vanguard follows four clear principles that have proven effective for investors over decades:

1. Set clear goals: Knowing your investment objective leads to better decisions. Whether it’s retirement planning, wealth building, or buying a house—a clear goal provides direction.
2. Invest in a balanced way: Diversification reduces risk and stabilizes the portfolio. ETFs with global exposure offer an easy way to achieve this.
3. Keep costs low: Every euro spent on fees reduces returns. Low-cost products make a significant difference in the long term.
4. Stay disciplined: Market fluctuations are part of investing. Those who stay invested will be rewarded.

These principles help especially beginners approach their financial future with confidence and foresight.

Conclusion: It's Time to Take Action!
Safety is important - but it should not lead to stagnation. Women, in particular, have a lot of catching up to do when it comes to financial matters. Those who inform themselves now, start a savings plan, and invest step by step lay the foundation for greater financial independence. The savings account may be a classic, but it’s time for an update.

About the author of this guest article:
Chris Hofmann is a mother of two sons, Head of Sales, and ETF expert at Vanguard. At the Fondsfrauen Summit 2024 (photo), she participated in a panel discussion on active and passive asset management.

 

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