It seems that every day I notice another article or study on Gender Lens Investing. This isn’t surprising considering that there are now at least 35 options of gender lens funds.
What is Gender Lens Investing?
Gender Lens Investing is a subset of “Impact Investing”; that is investments that are made to have a positive (and profitable) social and environmental impact on the world. Traditionally GLI has meant investing in companies that have larger than average representations of women in leadership positions and on their corporate boards of directors. But there are other approaches to consider: providing women entrepreneurs access to funding, or investing in products and services that improve the lives of women.
How Does It Fit Into a Portfolio?
The easiest way for the average investor is access Gender Lens Investing is through ownership of corporate stocks, or mutual funds that hold these stocks. Investors or fund managers consider factors such as pay equity, board representation, parental leave policies, anti-harassment policies, and management training programs. Some GLI mutual funds focus on just one of these areas.
You Don’t Have to Sacrifice Performance
Investors often think that by pursuing investments that focus on improving the lives of women and girls they must necessarily accept lower returns. But this is emphatically not true. A study by Bank of America Merrill Lynch found that companies with at least 30% women in management have enjoyed higher subsequent one-year Returns on Equity since 2012. Companies with more women in board seats or senior leadership are performing better in terms of sales, profitability and invested capital(1)
If you are interested in adding GLI to your portfolio, speaking with a financial advisor is a great place to start.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through GPS Wealth Strategies, a registered investment advisor and separate entity from LPL Financial.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.