When a slew of U.S. tariff announcements sent global markets into a days-long tailspin in April, it was hard to find anyone working in finance who felt anything other than pessimism. But there was one headline that offered a chink of light. “Women-led companies are outperforming the downturn,” Fortune magazine proclaimed, with a necessary caveat: “at least for now.”

The article was referring to the performance of an exchange-traded fund composed solely of stocks in companies run by women. According to the piece, asset manager Hypatia Capital’s Women CEO ETF outperformed the broader S&P 500 by just over a percentage point during the rout.

When asked why she thought the fund was holding its own, Patricia Lizarraga, a managing partner and chief investment officer at Hypatia, theorized that it may be because women-led companies are more likely to have defensive balance sheets, lower debt-to-equity ratios, and higher cash reserves. In other words, women might be more economically conservative.

“In a down market, when investors may punish highly leveraged companies and reward stability and larger cash reserves, these traits may become a competitive advantage,” Lizarraga told Fortune. “The WCEO ETF, which includes a diverse range of companies from small-cap to mega-cap, may be benefiting from this prudence.”

While the situation in April was rare in many ways, the difference in how women-led companies performed relative to others may speak to a broader truth. When it comes to money – investing, spending and trading, but also even just thinking about it, research shows that women and men behave differently. And as we brace for a huge generational wealth transfer, a shift that will see trillions of dollars’ worth of assets entering the hands of women over the next few years, that shrewdness might not be such a bad thing.

Gendered risk aversion?

Several analyses over the last few years have provided evidence that women and men behave differently with money, especially when taking risks and potentially dealing with losses.

A paper published in 2023 by academics at the University of Bath in the U.K. found that women feel the pain of losses more intensely than men when they gamble or make investments. That study also found that, overall, women are less willing than men to take risks, with more than half of the gap between genders in this regard accounted for by the higher levels of loss aversion among women and a further 3 percent attributable to their lower levels of financial optimism.

But with these findings, it’s important to appreciate the nature and origin of gender differences. In recent years, it’s become apparent that the divide in approaches to risky behavior is more likely due to social conditioning than biological factors. In other words, everyone is wired the same when making decisions about money, but the world around us has conditioned us to think or act in a certain way. And because women are more likely to encounter backlash and negative consequences than men when taking risks, they’ve been taught to think twice before doing so, studies indicate.

Then there’s also the messaging to which we’re all exposed every day. “Women are less likely to be taught or encouraged to invest growing up,” Jasmine Rashid, an author, impact investor and financial activist, said in an interview. “Financial media has historically targeted men more directly with investing products and language,” she adds. Some women, she says, also suffer so-called money trauma – broadly defined as the emotional, psychological, and even physical distress caused by negative financial experiences.

The power of caution

Whatever the underlying cause, though, being cautious by default might not always be a bad thing. Studies show that women are less likely to jump on investment trends, are more likely to seek advice from an investment professional before deciding where to put their money, and are less likely to panic buy or sell during times of market volatility than men.

Indeed, a recent study by Fidelity found that 51 percent of women who invest say they typically stay the course on their investments when the market experiences a dip, compared to just 43 percent of men. And all of this seems to be paying off. According to Wells Fargo, women generally score higher returns than men over a five-year investment period.

Of course, one circumstance under which risk-aversion is not a superpower is if it inhibits women from investing altogether. Despite women making up a growing portion of the investor population, a gender investing gap persists: About 37 percent of women surveyed by Aviva, a UK insurer, recently said they do not invest at all, compared with only 24 percent of men.

“There are still massive disparities in terms of professional fund management, access to venture capital and other financial metrics,” Janine Firpo, an author, angel investor and the co-founder of the non-profit Invest for Better, said in an interview.

This imbalance is concerning because women may be missing out on reaching their full economic potential. It may also have greater impact in coming decades as the so-called Great Wealth Transfer heats up, with women in the U.S. forecast to inherit some 70 percent of $124tn over the next 25 years, according to estimates from Bank of America.

Indeed, Firpo says, if we manage that wealth transfer intelligently, it could allow “women to step into their financial power in ways that reflect their goals, ambitions and views on the world.” And that could be a good thing for everyone.

“Research shows that when women have more money, their confidence builds. We also know that a majority of women want to invest their money with their values,” Firpo says. “We already see this in the choices they make through their philanthropy,” she adds. “My guess is that we can expect to see more investments in support of women and girls, women’s health, the care economy, and other issues that directly touch and impact the lives of women and their families.”