Extensive research shows that women’s higher-level organizations in the field of leadership (WIL) report higher performance in a range of metrics. Established on the basis of WIL and other gender equity criteria, the 29 Gender Lens Equity Funds (GLEFs) available to individual investors include 13 global equity funds and 16 regional equity offers. As of March 31, 2021, AUM G 3.28 billion for the GLEF Group.
In line with global equities, these funds typically turn into single-digit profits for a three-month period ending March 31, 2021, doubling the number of funds. Twelve-month absolute returns for the global and regional equity segment were strongly positive. Relative performance for both periods was mixed.
Among the new economic recovery, Financial is the largest AUM-weighted GICS sector allocation for the group until March 31, followed by information technology. These sectors have been trading the top allotted space for the GLEF Group for the past two years.
According to Equilip’s 2020 “Gender Equality Global Report and Ranking”, no sector has scored more than 50% in achieving equality, which provides a gender score in the global dataset of the 7th largest public company. The sector score was in a small band of 31% to 39%, the last place was information technology. Permanent gender inequality is not a new phenomenon in technology companies and it has been widely documented.
Technology stocks turned into a light quarter
For the past two calendar years, the largest technology and technology-related stocks have been generating massive market returns. This trend slowed in the first quarter, as the S&P 500 Information Technology NTR index lagged behind the S&P 500 index. The seven largest technology providers are known as Fangman stocks: Facebook, Apple, NVIDIA, Google (alphabet), Microsoft, Amazon and Netflix. Posted mixed returns for this quarter, the S&P 500 index performed just over three.
Amazon, Facebook and Google are facing anti-trust regulatory scrutiny. Facebook and Google are under pressure for data privacy and security issues, and Netflix is increasingly competitive.
Nevertheless, the market cap of these FANGMAN stocks ended quarterly at 8. 8.16 trillion, accounting for 17% of the total U.S. market as of March 31st. Twelve-month returns were strong even though the S&P 500 index surpassed two for this period.
Gender spotlights on the largest technology stocks
The GLEF Group has 157 unique top 10 holdings. Of these, 87 fall into the global equity fund category. IT represents 37 of the top 10 holdings, followed by industrialists (27), consumer considerations (26) and financials (24). (Three of FANGMAN – Apple, Microsoft and NVIDIA – are in the GICS information technology sector; Alphabet, Facebook and Netflix are in communication services; and Amazon is at the discretion of consumers.)
All of FANGMAN’s stocks appear on the first quarter’s top holding list. The US equity holds two of the GLEFs, the Fidelity Women’s Leadership Fund (Canada) and the Impact Share YWCA Women’s Empowerment ETF, six of the seven. Of the global equity funds, UBS Global Gender Equality holds at least one except UCITS ETF, six funds hold three of them. Of the 22 global and North American equity funds, 15 are owned by Microsoft, 10 by Amazon and seven by Netflix. Google is held by only two GLEFs.
The WIL matrix for FANGMAN is mixed, with significant gaps at the top. There is no female CEO, board chair or president behind the S&P 500, where women are 6% CEOs. The group has three female CFOs and two female COOs. Board representation is a bright spot. Microsoft and Facebook have the most powerful female board representation in the group, at 45% and 44%, respectively, followed by Amazon at 40%. Only NVIDIA follows the S&P 500 (28%) and Equileap (25%) averages for women on board.
But for women at work, only Netflix and Amazon average or above. All others represent 45% and 37% of the S&P and Equileap average workforce, respectively. Both Amazon and Microsoft lag behind the Equilip dataset with an executive level of 17%.
Within FANGMAN companies, employees and women in the most senior positions are under-represented, but they hire on average or more on board.
In other gender metrics, four out of seven FANGMANs have used compulsory arbitration to deal with sexual harassment claims or have never used compulsory arbitration. Forced issue Database, a joint venture between Adasina Capital, Tara Health and others. The policy has been criticized for allowing employers to cover up allegations of misconduct.
Four of the seven are on Arjun Capital’s latest list Scorecard In terms of transparency of gender and ethnic pay gap, where Facebook, Google, Microsoft and Amazon have all achieved C grade. Also, only Facebook, Google and Microsoft are signatories to the UN Women Empowerment Policy. None of Fangman made it to the 2020 Equilip Top 100 list of corporate gender equality leaders.
The GLEF Group has 34 non-Fangman information technology leaders. Overall, the WIL metrics of these firms outperform FANGMAN, suggesting that GLEF investment criteria are better than WIL’s than being rewarded by the market. There are three female CEOs or %%, which puts non-Fangman top IT holdings above%% CEO in S&P 500 and 0% in Fangman. In addition to a chair and a president, there are eight female CFOs. Most notably, female board representation in this non-FANGMAN group is 74%, above the S&P 500 and Equileap averages. 32% do not use coercive arbitration to settle sexual harassment disputes.
All of this information emphasizes a repetitive theme: the pace of progress for gender equality is very slow and much more needs to be achieved across the investment landscape before women can be fairly represented.
For more analysis from Meripat Smoker, CFA, visit Parallel meaning.
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All posts are the author’s opinion. As such, they should not be construed as investment advice, or the opinions expressed must not reflect the views of the CFA Institute or the author’s employer.
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