Studies have shown that companies with female leadership outperform their male-dominated counterparts, and the exchange traded fund (ETF) and mutual fund industries have developed investment vehicles for those who want to bet on gender diversity’s positive impact on corporate performance.
The Peterson Institute for International Economics and EY, formerly known as Earnest & Young, analyzed results from nearly 22,000 global, public companies across various industries and sectors, and found that by having at least 30% women in leadership positions adds 6% to net profit margin.
Research conducted by MSCI in September 2015 noted that companies in the MSCI World Index with three or more women on their board or with a higher percentage of female directors than average in its country, generated a return on equity of 10.1%, above the 7.4% return for those that didn’t.
With studies showing that having women in leadership positions contributing positively to a company’s performance, it makes sense for investors to invest in companies that put more women in these roles.
There are a few options for investors wanting to focus on companies with female leaders, including mutual fund Pax Ellevate Global Women’s Leadership Fund (PXWIX) as well as ETF SPDR SSGA Gender Diversity Index ETF (SHE).
PXWIX is a broadly diversified mutual fund that invests in the highest-rated companies in the world for advancing women through gender diversity on their boards and in executive management.
SHE seeks to provide exposure to American companies that demonstrate greater gender diversity within their senior leadership versus other companies in their sector.