Why Women Beat Men at Investing: the Rolls-Royce Test

The evidence that women beat men at investing is more robust than a single BBC article suggests, and the behavioural explanation behind it carries practical lessons that hold up whether you are looking at a three-year dataset or a 30-year career.

What the research actually shows on women beat men investing

The headline finding from the original study is that over a three-year period, female investors achieved a 50% cumulative return (14.5% annualised) against 47% for men (13.7% annualised). The primary explanation is straightforward: men made roughly twice as many trades. Frequent dealing is a drag on returns in two ways: it introduces transaction costs, and it tends to mean selling sound positions too early while chasing the next idea.

The broader research supports the same conclusion. Motley Fool’s analysis of women and investing statistics finds that across multiple studies, women outperform men by 0.4% to 1.8% annually. A Wells Fargo Advisors study covering January 2018 to December 2024 put risk-adjusted returns at 1.01 for female-led joint accounts versus 0.83 for single male investors, the lowest of the four groups measured. Warwick Business School research, cited in the same report, found female investors held fewer speculative positions and were quicker to cut losses rather than ride them down.

There is a selection-bias caveat worth noting. Only 26% of British women invest compared with 41% of men, so the female sample may skew towards more confident or financially literate participants. That said, the directional finding is consistent across multiple independent datasets and methodologies, which makes it hard to dismiss as a statistical artefact.

The three-year window used in the original study is a separate problem. Three years is a reasonable period for a tactical assessment; it is not long-term investing. A realistic investment horizon across a working life runs closer to 30 years. The behavioural advantages that women appear to hold — patience, lower turnover, willingness to sit through volatility — compound far more powerfully over that kind of timeframe.

Rolls-Royce as a case study in holding through the noise

Rolls-Royce (LSE: RR.) is as clear an illustration of that principle as the FTSE 100 has produced in recent years. The stock rose more than 1,500% in roughly five years. Investors who sold after the post-pandemic doubling, deciding that was a reasonable exit, missed the bulk of the move entirely. The lesson is less about Rolls-Royce specifically and more about what happens when you interrupt compounding prematurely.

The current financial picture at Rolls-Royce is materially different from the recovery narrative that drove the early gains. The company’s full year 2025 results show underlying revenue of £20,059m and underlying operating profit of £3,462m, at a margin of 17.3%. Free cash flow reached £3,270m in 2025, up from £2,425m the prior year. Underlying earnings per share came in at 29.55 pence, against 20.29 pence in 2024.

Against that backdrop, management announced a share buyback programme of £7bn to £9bn for 2026 to 2028, with £2.5bn earmarked for 2026 alone. Mid-term targets have been upgraded to underlying operating profit of £4.9bn to £5.2bn and free cash flow of £5.0bn to £5.3bn, expected two years ahead of the previous schedule.

The civil aerospace business remains the earnings engine, but two other divisions add breadth. Defence provides revenue that is structurally less cyclical than commercial aviation, and Power Systems serves industrial and marine markets. A pandemic-scale grounding of global fleets remains a tail risk for the civil book, though the barriers to entry in large aero-engine manufacturing are high enough to make the competitive position durable across cycles.

The small modular reactor programme is longer-dated. Rolls-Royce SMR Limited, which develops a 470 MWe pressurised water reactor design, has received £210m in grant funding from UKRI and operates on a budget of over £8 billion. The 2024 Annual Report confirms that the design completed stage two of the UK Generic Design Assessment and that Rolls-Royce SMR was named preferred supplier to Czech utility ČEZ Group. Following its deconsolidation in early 2025, Rolls-Royce’s stake in the SMR unit was recognised at a fair value of £732m, with the company expecting it to reach profitability and positive free cash flow by 2030. The programme is an option on a significant future revenue stream, not a near-term earnings contributor.

The two threads connect. The behavioural trait that research consistently attributes to female investors — holding through noise rather than trading around it — is precisely what Rolls-Royce has rewarded over the past five years. The next test for current holders is whether the upgraded mid-term targets, due roughly two years ahead of the original schedule, are met without a meaningful macro deterioration in global air travel or defence budgets.