Demographic and economic trends are bolstering women’s discretionary income, which will benefit companies targeting this client base, says David Bianco, head of US equity strategy research.

“Women may increasingly become the higher-income earners of US households, and since they make the bulk of household spending decisions as it is, we think their stronger purchasing power relative to men bodes well for spending on a wide range of categories from vacations to cosmetic procedures to home furnishings,” said Bianco.

Investing in high-end luxury retailers is one way of gaining exposure to women’s spending power, and particular sectors standing to gain from this trend are:

•Apparel companies and other retailers targeting the high-end female consumer

•Makers of cosmetics and beauty products

•Containers and packaging companies serving fragrance/cosmetic markets

•Specialty pharmaceutical companies that make products related to facial and breast aesthetics

•Consumer finance companies offering travel features/rewards and other discretionary spending items

Backing up its strategy, Merrill Lynch says that not only is the unemployment rate for women almost two full percentage points below that for men, but women are poised to benefit more from job creation in sectors such as healthcare going forwards. Meanwhile, women are getting more bachelor’s degrees than men and the pay gap is narrowing.

Women aged between 30 and 39 are expected to be among the fastest growing demographic segments, which bodes well as people tend to reach their earning and spending peak during these years, the wealth management firm said.

The firm’s “long-on-women” research theme has identified companies such as Tiffany & Co, Urban Outfitters and Gap as potential beneficiaries, as well as health care companies like Medicis Pharmaceutical and Allergan. It also noted that American Express has a women-focused growth strategy, with reward and travel features targeting high-end female consumers.