Equality. Economic strength. When more women participate in the workforce and hold positions in the C-suite or on boards, everyone benefits. Gender lens investing offers the ability to put words into action.
- Gender lens investing operates in a number of ways, but two of the most recognizable are:
- Incorporating gender issues (pay, number of women on boards and in management) into financial analysis when selecting portfolio components
- Using capital to invest in programs that benefit women and girls, such as STEM program or business loans
Room for Growth
Gender-lens is a nascent area of investment. AUM as of July 2017 totaled $561 million—though that number had risen five-fold in just three years. SSgA, Bloomberg, and Thomson Reuters have all entered the market with gender-lens focused indices. Venture funds are another area ripe for growth according to Women Effect, a research group at The Wharton School. Some even claim that gender-lens investing is the environmental-focused strategy of 15 years ago.
Imagine looking through a kaleidoscope. A few turns changes the picture completely while still using all the same colors and shapes. The same is true for gender lens investing. Opportunities exist across a broad spectrum of products: mutual funds, promissory notes, private investment. When you apply a screen that seeks companies with a certain number of women on its board, you may come across highly successful organizations that have flown under the radar. And since studies have established that women leaders often equal successful companies, you will likely find significant value. Criteria can include, but are not limited to:
- Companies that provide products or services for women and girls
- Number of female executives, portfolio managers, or other leaders
- Firms that are founded and owned by women
- Specific funds or indexes that are built with a gender lens in mind, such as the indices mentioned above or a plethora of mutual funds from firms such as Pax World, Calvert, and Parnassus.
The issue of women in the workplace and pay equality can appear to move at a glacial pace and unless you are a CEO, a Congressperson, or any other person of influence, it can be frustrating not to see progress. As the adage goes, “money talks.” Here’s a way to put that money to (women’s) work.
