“Compound interest is the eighth wonder of the world.” — Albert Einstein
$40 trillion
That’s how much wealth U.S. women are expected to come into over the next quarter of a century, according to a report by Cerulli Associates.
Baby boomers, those born between 1928 and 1964, and older generations hold about $100 trillion of the roughly $124 trillion pile that is likely to soon be transferred to heirs. Most of it is concentrated among men but soon enough nearly $40 trillion will start making its way to widowed women in the baby boomer and older demographic.
The handover could dictate which industries become the next dominant players and which ones fade away, especially as women ramp up their investing and spending. To some extent, women already drive the economy forward, as readers of Jan. 25, 2025, Signal From Noise may remember, so one could make the case that coming into more money could result in their having an even bigger impact on the economy.
Ahead of International Women’s Day on Saturday, March 8, we celebrate women’s advancements in wealth and investing while discussing what lies ahead.
For generations, women were barred from full and equal access to the workforce, and wage discrimination against them was legal. Their access to the economy and banking system was similarly limited. For example, only in 1974 did they get the right to open credit cards in their own name.
While even back then, women typically made a majority of everyday household decisions, the slow pace of progress in women’s rights set them back by generations in the workplace and barred most of them from achieving financial freedom and independence. That’s why it’s so important to watch this ongoing so-called “Great Wealth Transfer,” as it represents a new era of wealth and investing – not just women but also their households.
And it seems to be about time, as, by some measures women are doing better than men. More women are enrolling in college than men, and more are participating in the labor force. U.S. women now occupy 29% of C-suite positions compared with just 17% a decade ago.
In many countries, one in three high-growth entrepreneurs and nearly two in five export-oriented startups are led by women. Fewer women around the globe and the U.S. are choosing to become mothers, which some argue could aid their professional careers.
That’s good news for the economy and for investors. Not only are women doing well socially and economically and expected to come into money, but evidence suggests that they’re being savvy by putting more money to work in the market.
About 7 in 10 women had money in the stock market in 2024, an 18% increase from the year before, according to a Fidelity survey. The asset manager and brokerage noted that within its own retail customer base, the number of women grew more than 20% in 2022 and 2023.
The survey said women in Gen Z, those born between 1997 and 2012, are leading the charge in taking control of their finances and investing, with about 77% young women owning stocks, up from 71% in 2023. That marks a big shift, as for decades, decisions pertaining to investments and house purchases were made by the men in the relationship, even if they impacted both individuals.
Older generations are trying to catch up. The percentage of women in Gen X, those born between 1965 and 1980, and boomer women who invest in the stock market recorded the largest year-over-year increase – 18% and 23%, respectively, over the same period (2023-2024).
As a result of this increasingly active participation, the 401(k) balance gap between women and men has narrowed over the past three years, according to a Bank of America research note.
To be sure, there is still a significant divergence in retirement savings for women and men. About 55% of women versus 47% of men in the U.S. have less than $100,000 in retirement savings, BofA research said.
One potential reason to explain that? Women typically opened their individual retirement accounts two years later than men and made contributions over five years, whereas men usually invested money over six years, which contributes to a widening gender divide, according to a Vanguard research piece.
It is widely known that the earlier one starts investing, the more time there is for the money to compound and grow.
Women are also more likely to take time away from work to raise their children, which can impact career progression and ultimately the contribution rates.
The other reasons for the disparity include a lack of financial knowledge. Women also shy away from crypto and tend to be passive investors, BofA researchers argued.
But it looks like the tide might be changing on that, too. BofA analysis of Fed data reveals that about 66% of Gen Z women are involved in financial decision-making compared to 60% for their male counterparts, marking a shift from previous generations. For comparison, women in the Xer and baby boomer generations are around 5% less likely to share in their households’ financial decisions than men.
In some ways, that change is welcomed as many studies have found that women make for better investors than men.
Of course, the wealth transfer will be far from evenly distributed. To no one’s surprise, affluent women in wealthier countries will likely inherit more money than those in poorer countries. Meanwhile, women in struggling nations are less likely to see net gains from the great wealth transfer, according to BofA’s analysis of the Federal Reserve’s Survey of Consumer Finances.
Women in Asia are supposed to drive the next leg compared to Europe, thanks to improving wage inequality, entrepreneurship, rising political empowerment and better access to leadership positions, according to the research.
We will now quickly go over areas and industries that will likely be impacted by the wealth transfer. While spending on baby-related items, such as baby formula, bottles, diapers, toys, and car seats, could go down as birth rates decline, many other areas stand to benefit from the great wealth transfer to women:
Sports
Doesn’t everyone watch women’s sports? In addition to being entertaining to watch, the industry is set to grow bigger as more women receive inheritances. As discussed in our Jan. 2, 2025, First to Market, the Women’s National Basketball Association was recently crowned the fastest growing brand in 2024 among adults in the U.S. and delivered a record $136 million in media value for sponsors. A Wall Street Journal story recently reported that in less than three years, about $1 billion has been spent on or committed to building facilities for National Women’s Soccer League and WNBA teams.
Luxury real estate
Single women homebuyers will help drive the luxury real-estate market in 2025, according to a report by Sotheby’s International Realty. They outnumbered single men by 12%, the report said. “From personal experience, younger women are motivated to purchase their own homes in part because of the opportunity to build wealth,” Marsha Burke, global real estate advisor at Scenic Sotheby’s International Realty on Florida’s Emerald Coast, said in the report.
Luxury Goods
Women like shiny things. As such, they’ve ramped up their spending for luxury goods recently. The De Beers 2023 Insight Report notes that 31% of U.S. women who bought diamond jewelry in 2020 bought it for themselves. Women globally are buying more of their own luxury goods, starting with designer handbags and shoes, and now extending to fine jewelry, the BofA report said.
Healthcare
“FemTech” is an emerging healthcare subsector that provides tech-enabled solutions across female-specific conditions and general health conditions that affect women disproportionately (autoimmune disease, migraines, osteoporosis). However, “FemTech” represented only 1% of total health tech investment in 2022, which means that there is room for it to grow, BofA analysts argued.
Wealth management
A survey by Ellevest found that 94% of women would prefer to work with a female advisor. That’s because female clients have unique planning needs and value advisors who take the time to listen and involve them in the decision-making process. Research from Merrill shows that having a woman advisor can give women investors a boost of confidence. If advisors want to make money off women, they need to start focusing on hiring other women.
Conclusion
While we at Fundstrat have often discussed the tailwinds likely to be created by a generational wealth transfer to Millennials, it’s also important to home in on who the key beneficiaries will be in that specific demographic. That’s because it’ll help investors identify areas and sectors of the market to expand into, and also in a way, help grow opportunities for women.
Time to shine, ladies!
As a reminder, Signal From Noise should be used as a source of ideas for further research rather than as a source of investment recommendations. We encourage you to explore our full Signal From Noise library, which includes deep dives on investments related to natural disasters and an update to our overview of the semiconductor industry. You’ll also find discussions about the TikTok demographic, artificial intelligence, and weight loss-related investments.
