If you find yourself often supporting woman-led businesses or nonprofits that benefit women and girls, then Gender Lens Investing may also be for you.
You can literally invest in women!
Environmental, Social, and Governance (ESG) Investing, or sustainable investing, refers to a company’s investment in those practices to help ensure positive impacts for both the company and our communities. Gender Lens Investing is a subset of ESG Investing that selects companies with high percentages of women in leadership roles.
While women comprise 44.7% of total S&P 500 company employees, only 26.5% are at a senior or executive management level, including 5.8% as CEOs and 21.2% holding board seats.
Gender Lens Investing focuses on the “G”(for governance) in ESG, including data points like:
pay parity
supplier diversity
corporate benefits supporting caregivers
safety measures
inclusivity at work
women’s representation in leadership roles and the leadership pipeline
Whether you’re investing on your own or using an advisor there are several ways in which you can save towards your goals while investing in women. There are packaged products such as mutual funds, exchange traded funds, or separately managed accounts that add a gender lens to their strategies. Or you can screen individual companies or ESG Investments to add your own gender lens to your portfolio. Regardless of the method, adding a gender lens is a great way to align your portfolio with your personal values.
Does Gender Lens Investing work? Yes!
There is a growing amount of data to back up the strategy. Although homogeneous teams can feel more comfortable, study after study shows that they are less effective. Diversity within companies (including women) leads to better performance. Research shows that gender diverse leadership teams have historically delivered better financial performance.
The Shecession of 2020 disproportionately negatively impacted women, but most Gender Lens funds earned double digit returns with only 2 declining (out of the 28 options that were available globally to individual investors).
2020 S&P returned 17.8% and the MSCI ACWI Index (tracking broad global equity-market performance) returned 16.3%, influenced by the outperformance of the technology sector.
As a woman leading a financial investment firm in Chicago, I am thrilled that you are connecting with Merino Wealth! I find Gender Lens Investing is a great option to merge one’s personal values with an appropriate investment strategy. CLICK HERE if we can help you apply this strategy to your portfolio.