New York-based BlackRock has rolled out a model portfolio specifically tailored to women who are becoming an increasing presence in the investment world.
Women have always been investors, but over the past few decades the percentage of invested assets held by them has increased as women accumulate more wealth and become the sole investor in their household. However, BlackRock believes many investments strategies and portfolio structures are geared for the investment habits and general lifestyles of men.
In response, BlackRock this month launched the Model Portfolio for Women, a multi-asset investment model that takes into account three specific points that differentiate men from women.
The first is life expectancy, as women are expected to outlive men by more than five years. Currently women hold about 40% of their overall portfolio in cash, and with a greater life expectancy, they cannot anticipate that money will last them for the duration of their lives, according to Carrie Schroen, BlackRock Divisional Director for U.S. Wealth Advisors.
The second point is the income gap, as women on average make about $0.82 per $1 that a man earns. With this discrepancy, a woman’s investable income is smaller than a male investor’s.
The final point also has to do with a woman’s investable income as women spend an average of about a year and a half out of work to take care of their children or older relatives again diminishing the money they have to invest.
As for the portfolio itself, according to Eve Cout, BlackRock Model Portfolio Pillar Head, it combines passive and active investment strategies and re-balances up to six times a year depending on various circumstances. The model is also tailored for investors no matter their age so women of different investment goals can take advantage of the portfolio.
“Model portfolios are a primary choice for investment advisors,” Cout said. “It is a great way for them to personalize an investment [for a client].”
BlackRock has been hearing from its financial advisors for years that women needed more investment options. Schroen said that she is pleased the firm can deliver for its partners and to a deserving client base.
To get the word out about the new portfolio, BlackRock has been reaching out directly to its financial advisors in addition to promoting it on a special section on its website that targets female investors. The firm has also been working to provide better education for women about how they should be investing their money and what has been the problems with previous investment options.