The third quarter was for gender lens investments as well as women in leadership in the financial sector and elsewhere (WIL).
Gender lens equity funds have turned out to be generally positive returns, consistent with a broader market. This suite of Mutual Funds and Exchange-Traded Funds (ETFs), which has proven that companies with higher WIL metrics generate higher financial and stock price performance, has 23 primary gender lens equity funds available to individual investors. Of these, nine are global and 14 are regional.
Overall, the year-to-date (YTD) earnings for the sector are mixed between the sharp change in prices as a result of the global epidemic and the associated economic downturn.
Among global equity funds, the MSCI was ahead of the World Women’s Leadership Index for four quarters, while only two were better than the MSCI World Index. Mirova and AXA funds have exceeded their criteria. Within regional funds, those who have concentrated on the United States, Canada, and Japan generally follow their criteria, while their European parts outperform them. Notable regional outperformers were Impact Shares YWCA, Ampega and BNY Mellon Japan Women’s Money Fund.
The managed assets (AUM) for the Gender Lens Global Equity Fund are now 2.03 billion, up from 1. 1.74 billion in the previous quarter. Global equities account for 76% of the total, and at 57%, the United States tops the AUM-weighted allocation, followed by Canada, France and Germany. The two biggest sectors are information technology and finance.
An eventful quarter for women in financial services
The Q3 was part of the ups and downs around specific themes for the WIL and WIL metrics. Women were a bright spot in leading financial services. Citigroup has announced that Jane Fraser will be its first female CEO in February, making her the first female CEO of a major global bank. This milestone indicates a major cultural change in Citigroup. Last year, it became the first major U.S. company to reveal both the middle and integrated gender and ethnic pay gaps for its global operations. It also launched an advertising campaign to encourage gender pay inequality. For City, this gap narrowed slightly from 29% in 2018 to 27% last year.
And women were not alone in announcing Citigroup leadership. Other banks have taken similar steps. JPMorgan has added Thasunda Brown Decket, chief executive of its consumer banking division, to its steering committee, and Goldman Sachs has selected Stephanie Cohen as its co-head of consumer and asset management businesses.
Will these important steps lead to rapid progress towards gender equality in financial services? That remains to be seen. But progress for women has been very slow. According to Catalyst, women represent only 23% of board managers in large financial institutions and only 12% of CFOs in large-cap financial services companies. Only 1%% of companies ০০ companies একজন including a female CEO, president, or chair of the board% were financial institutions. According to a compilation of women’s parallel finance in terms of leadership among 17 major index companies, including Multi-Cap Russell 3000 and S&P 1500.
Indeed, if there are any questions about the depth and cost of the gender cap in the financial sector, YTD’s recent Goldman Sachs analysis has provided an instant reminder to fund all men, all women, and the mixed-sex portfolio management team. Even after adjusting for the risk, 116 teams, with at least one-third female membership, did better than their 800 male counterparts. Asset management is growing in the hot seat as more attention is paid to this type of data. For example, Bank of America recently announced that it would begin ranking ranking and recommendations of asset managers based on diversity scores.
Big hazards for women to participate in workshops
Although women have benefited this quarter, especially when it comes to leadership in the financial sector, they lag behind in other areas. The number of global epidemics on women, in the form of a caring crisis in the United States and around the world, and the loss of overseas jobs, has become even more apparent. The share of female labor force participation in the United States fell below 55% in the first quarter for the first time since 1986. How much does it cost for such a disruption in the career of American women? Estimates put the value tag of the care crisis at 341 billion.
And these recent headwinds come on top of other long-term and systemic challenges. There is a broken mark on the corporate ladder for women trying to reach that first management level. This contributes to a long-term gap for women throughout their careers. Add to that the burden of well-documented and unpaid care work and more breaks or departures from their position, and the challenges that women face come in complete relief.
Among the risks involved in the epidemic are the drastic advancement of women in corporate leadership and the sustainability of various U.S. workshops. In fact, according to the National Center for Women’s Law, women who dropped out of the workforce in September were women, who received only%% of the newly created jobs.
The challenges are clear. Since researchers are advocating for women-centered recovery, public and private gender lens investments have a role to play. It can both promote progress to narrow the gap between WIL and gender pay and make that progress more investable.
For more analysis from Meripat Smoker, CFA, visit Parallel meaning.
If you liked this post, be sure to subscribe Entrepreneurial investors.
All posts are the author’s opinion. As such, they should not be construed as investment advice, or the opinions expressed do not necessarily reflect the views of the CFA Institute or the author’s employer.
Image Credit: © Getty Images / Solstock