March 29, 2018
WOMEN’S HISTORY MONTH seems a good time to call attention to lingering issues of inequality—like a still-stubborn wage gap, and the unequal representation of women in management and government.
Increasingly, people are looking for ways to put their money where their values are by investing in companies that support women’s equality. In fact, research from Veris Wealth Partners indicates that assets under management invested in support of gender equality—so called “gender lens investing”—have grown from $560 million to $910 million from June 2016 to October 2017 alone.1
So what is gender lens investing? “It’s not small, soft, and pink,” says Jackie VanderBrug, Investment Strategist in the Global Wealth and Investment Management Chief Investment Office (GWIM CIO). It's the deliberate integration of gender-based data into financial analysis, with the expectation of finding additional opportunities and uncovering and mitigating risks."
Let’s break that down. From a practical perspective, it means investing in:
1. Businesses founded, run or funded by women. VanderBrug points to data by MSCI ESG Research that shows that from 2011 to 2016 U.S. companies with at least three women on their boards experienced 10% median gains in return on equity and 37% gains in earnings per share.2
2. Companies whose policies encourage gender equality. More and more companies are taking steps to support equality. For instance, a company might choose to drop sexist stereotypes from its advertising, or offer STEM tuition reimbursements, knowing that women in STEM experience a smaller gender wage gap and earn 35 percent more than those in non-STEM occupations.3
3. Companies that make gender equality—from top management to the ground floor—a priority. According to VanderBrug, companies that exhibit greater gender diversity not only among senior leadership but also in the rest of the workforce may experience better performance, reduced turnover and higher employee engagement, all predictors of higher earnings.
4. Companies that produce products or services that benefit women. VanderBrug points to efforts by one company to create software that is free of gender biases, and she reminds investors that women in the U.S. control 73% of all household spending.4
Gender lens investing, says VanderBrug, is “a way to identify areas of opportunity in the search for enhanced investment returns.5 If you’re interested in exploring it further, VanderBrug recommends meeting with your advisor and asking how you might increase your portfolio’s exposure to the growing economic power of women.
For more data and insights on the role that gender lens investing can play in your portfolio, read “Why Gender Lens Investing Is Good for the World—and Your Portfolio.”
1 Gender Lens Investing: Investment Options in the Public Markets. Veris Wealth Partners, October 2017.
2 The Tipping Point: Women on Boards and Financial Performance,” MSCI ESG Research (2016).
3Women in STEM: 2017 Update; United States Dept. of Commerce.
4 “Women Want More,” HarperBusiness, 2009
5 Past performance is no guarantee of future results.
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