Growth In Public Products Accelerates As GLI Marks 10th Anniversary
The flow of assets in Gender Lens Investing (GLI) continues to grow rapidly.
According to a new analysis by Veris Wealth Partners, asset growth in GLI products accelerated and totaled $3.4 billion as of June 30, 2019. In our 2018 GLI analysis, we reported $2.4 billion invested in GLI products.
As important, the size of the funds continued to grow, reflecting their growing popularity among individual and institutional investors. There were 10 investment products with over $100 million and six with over $250 million as of June 30, 2019.
Our analysis also showed that the gender lens market is still primarily a North American phenomenon and that the investment focus continues to be global and US large cap equities. However, there are now eight funds open in Asia/Pacific, two funds in South America and one in Africa.
Ten years after the term Gender Lens Investing was coined by the Criterion Institute, there are now more than 50 publicly available GLI products, a 300% increase since 2015.
The GLI Impact
The growth of GLI investments continues, but the real question is how is GLI improving the lives of women and girls?
The good news is that GLI is having a real impact.
More than 50% of public GLI investment products focus predominately on women in leadership and increasing gender diversity, according to Veris. This is defined differently with each product strategy, but most often is women on boards, women in the C-suite, and women in management. The focus on leadership, coupled with increasing shareholder advocacy efforts to increase board diversity, have helped. In 2009, women comprised 16% of S&P500 boards, and today they represent 26%1. Progress, yet still a lot more work to do.
The Business Case of GLI
We believe this trend is likely to continue because there’s a very compelling business case for GLI.
McKinsey & Company’s Power of Parity Report (2015) estimates global annual Gross Domestic Product (GDP) could be $12 trillion higher if gender inequality was addressed. Diversity also produces terrific results. Over the past decade, many studies have confirmed the superior financial performance of public companies with strong female representation at the board level and in senior management.
The positive impact of GLI goes beyond greater representation at the leadership level.
Research now shows connections between higher proportions of women in leadership with increased environmental, social and governance performance.2
Investors are also looking for broader impact and product sponsors are starting to take notice.
More than 20% of public GLI investment products focus on broader gender factors, according to Veris. They include reducing the gender pay gap; increasing women in the workforce; lowering barriers to women working outside of the home; improving health and well-being; increasing employee engagement; and expanding products and services serving women.
And, a handful of funds are incorporating UNSDG goals including UNSDG #5: Achieve gender equality and empower all women and girls.
Another significant area of asset growth has been providing access to capital for women in girls. Capital flows to those initiatives are typically made by angel, venture and private equity investors. In the public markets, access to capital for women is provided primarily through CDs, CRA qualified bonds and the growing number of gender bonds.
Just the Beginning
Clearly, there is much to celebrate as GLI marks its 10th anniversary.
The brave women who dared to ask if capital markets could improve the lives of women and girls have started a movement that is increasingly gaining momentum. From a handful of investment strategies with only one CD and one mutual fund, there is now an expanding number of stakeholders who believe in the possibilities of Gender Lens Investing.
The goal for all of us is to keep pushing and demonstrating the value of GLI to an expanding universe of investors for the benefit of all.
The Veris team is especially grateful to Suzanne Biegel, Catalyst at Large and Co-Producer, GenderSmart Investing Summit for her generous collaboration, and Diana van Maasdijk, Equileap.
12019 U.S Spencer Stuart Board Index Highlights
2Cristina Banaham and Gavrial Hasson, “Across the Board Improvements: Gender Diversity and ESG Performance” Harvard Law School Forum on Corporate Governance and Financial Regulation, September 6, 2018
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Linda Pei had a vision. In 1993, she launched the Women’s Equity Mutual Fund, the first U.S. fund investing in companies with positive track records ofhiring, promoting and generously compensating women.
Her fund marked the birth of “gender lens investing” (GLI), which is founded on the premise that investing intentionally for gender balance and equity can generate both financial and social returns.
For decades, however, there wasn’t much progress. Over the next 20 years, only four new strategies emerged explicitly incorporating gender into their financial analysis of publicly traded securities.
Fast forward to 2018. Over the past 12 months, we’ve seen more growth in GLI in a single year than we have in the past two decades.
As of June 30th, 2018, investors had poured $2.4 billion into 35 GLI vehicles holding publicly traded securities, according to the 2017 Gender Lens Investing report from Veris.
This is a 23-fold increase from $100 million just four years ago.
These investment vehicles range from U.S. and Canadian ETFs, to French and Nigerian mutual funds, to Australian ‘gender equality bonds.’
Click here to download Gender Lens Investing: Bending the Arc of Finance for Women and Girls.
Fully Diversified GLI Portfolios
As the number of GLI vehicles has increased, investors have begun making the leap from investing in single products to constructing entire, fully diversified GLI portfolios with clear missions.
Our 2018 report highlights three of these portfolios, each tackling distinct social issues: gender-based violence, women’s chronic under-representation in leadership, and the need for innovation in women’s health care.
This week, Alison Pyott and Luisamaria Ruiz Carlile of Veris will be sharing this research at theGender-Smart Investing Summit, taking place in London on November 1-2. The goal of the summit, expected to attract 300 champions of GLI, is “moving gender-smart capital with vision and velocity.”
Linda Pei would be proud that her vision endured.
Even greater would be her delight at the accelerating flow of capital into public market GLI products: the first $1 billion took 25 years. The second $1 billion took 12 months. How long to $100 billion? The first $1 trillion?
On March 5th, Veris Wealth Partners and Criterion Institute hosted the webinar Women, Wealth and Impact: Investing with a Gender Lens. Increasingly individuals, families and foundations are exploring how to use their consumer dollars, philanthropy and now their investment portfolios to address gender inequality. This webinar outlines several easy steps to shift your investments to support and empower women.
The program starts with Joy Anderson, President and Founder of Criterion Institute interviewing Patricia Farrar-Rivas, CEO of Veris Wealth Partners. Together they explore the webinar’s big take-away — moving beyond the ‘why’ and into the ‘how’ of investing to support women. This is followed by a short presentation and Q&A led by Luisamaria Ruiz Carlile and Alison Pyott, both Certified Financial Planners and Wealth Managers at Veris Wealth Partners based on their recently published thought piece Women, Wealth and Impact: Investing with a Gender Lens. This paper explores the business case for gender lens investing, but more importantly provides tangible steps you can take to increase gender equality with your investment portfolio.
Presented by: Criterion Institute & Veris Wealth Partners