Gender Lens Equity Investing evolved from extensive research demonstrating the financial, risk management, decision-making and other business advantages that result from having more women in leadership positions (WIL). In our coverage universe at Parallelle Finance, private investors have access to 27 global and regional equity funds with a gender lens.Its assets under management (AUM) totaled $3.47 billion as of June 30, 2021, representing a growth rate of 32% in the primary half of 2021.
Our coverage universe also features a growing group of diversity, equity and inclusion (DEI) funds that focus investments in firms with solid DEI policies. The assets under management of those DEI funds totaled $154 million as of June 30.
Gender lens fixed income also saw strong growth in the primary two quarters, particularly for gender bonds issued or sponsored by private financial institutions and development finance institutions (DFIs). Latin America leads in the full variety of gender bonds, with proceeds going to women-owned firms in various sectors.
As of June 30, gender fixed income assets under management totaled $7.71 billion, including bond funds, U.S. notes and certificates, a lending platform, and gender bonds in developed and developing countries. This represents a growth rate of 68% in the primary half of the yr, as assets under management in gender bonds issued by DFIs almost doubled over the identical period..
More women in leadership positions
Elsewhere, progress within the representation of girls in leadership positions is slow. Government mandates, regulatory measures and listing rules play a job, particularly together with shareholder activism. On August 6, 2021, the U.S. Securities and Exchange Commission (SEC) approved the groundbreaking NASDAQ rule on diversity on the board of newly listed firmsThis rule requires most listed firms (with some exceptions for foreign and small firms) to have no less than two different directors or to elucidate in writing why this isn’t the case.
Before the proposal greater than 75% of NASDAQ members didn’t meet the factorsalthough most had no less than one woman on their board. Smaller firms particularly still have essentially the most work to do to achieve the proposed thresholds.
In an identical step The UK Financial Conduct Authority (FCA) proposed that listed firms must be required to satisfy board diversity targets or make corresponding statements and publish data on the range of their boards and senior management.. Additionally, An SEC subcommittee has advisable the introduction of mandatory disclosure of gender and racial diversity on mutual fund boards. And Since California passed a law requiring women to be represented on boards of directors nearly three years ago, the variety of female corporate directors has doubled, although women remain underrepresented..
The role of world asset managers
Global asset managers have introduced a variety of policies and company governance statements to support the expansion of WIL in firms. Amid criticism of the preponderance of all-male boards, more asset managers have signalled their willingness to vote against non-diverse boards. BlackRock announced late last yr that it will push firms to reveal diversity data and data about measures taken to enhance that data.Similar statements from Vanguard, Fidelity Investments and State Street Global Advisors (SSGA), amongst others, soon followed.
BlackRock, JPMorgan and Goldman Sachs have since released their very own 2020 EEO-1 data, and a number of other others have committed to doing so or are releasing partial data.
An evaluation of the Diversity Voting Guidelines for the 12 largest global asset managers AUM’s study as of March 31, 2021, found that their approach to specified thresholds might not be high enough. These policies are inclined to “encourage” board diversity, with some not setting specific targets and others specifying thresholds of only one or two female and other diverse board members.
Advocating for one or two female board members leaves asset managers at an obstacle moderately than starting an initiative to realize parity on the board. A narrow majority of S&P 500 firms now have no less than 30% of board members female. Women hold 28% of board seats at Fortune 500 firmsAnd 36% of seats within the FTSE 100.
But which of those asset managers might be the primary to demand gender parity on the board? Or board parity that takes gender, race and ethnicity into consideration?
WIL at the biggest asset managers
And just as importantly, which of the foremost asset managers might be the primary to realize gender parity by itself board and at the highest management level? Our evaluation of the 12 largest asset managers found that Goldman Sachs and JPMorgan Asset Management have the very best female representation on their boards, followed by BlackRock, Allianz Group and UBS.
But the representation of girls on boards is progressing faster than gender diversity in the chief suite. Women in CEO positions are only 6% of each S&P 500 And FTSE100 Components and only 8% of Fortune 500 firms. In line with broader data, there’s an absence of female CEOs amongst top asset managers. Fidelity is the one such company led by a girl.
Among the highest asset managers there are five female CFOs and Research on the components of the Russell 3000 finds a correlation between a rise in profits and stock prices and the primary 24 months after a girl takes office as CFO.
Yet six of the 12 largest asset managers haven’t any women within the 4 key leadership positions – chairman, CEO, CFO and COO of the parent company – and 4 firms have only one. Fidelity leads the pack with three positions, but two of those positions are held by the identical person.
Only three of those asset managers have gender lens equity funds available to retail investors. The UBS Global Gender Equality UCITS ETF had $615.91 million in assets under management as of June 30, while the SPDR SSGA Gender Diversity Index ETF had $213.25 million and the Fidelity Women’s Leadership Funds had a combined $133.78 million. BlackRock’s DEI fund, the iShares Refinitiv Inclusion and Diversity UCITS ETF, had $58.59 million. None of the 12 firms sponsored or issued a gender bond, although some held manager roles. In a novel move, Goldman Sachs recently announced it would supply $10 billion in direct investment capital to eliminate opportunity inequalities for black women..
Global asset managers have two opportunities to strengthen their firms’ Willy Brandt Initiative. First, inside their very own ranks. Second, they need to take responsibility and pave the strategy to gender parity on the board and the next proportion of girls in the chief suite.
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