The Growing Influence of Women in the Marketplace
With the prevalence of the “me too” movement many industries are paying more attention to what women are saying; Hollywood is certainly not the only industry listening to the needs of women. Financial firms such as Morgan Stanley, Fidelity, and Edward Jones have been conducting surveys and studying the impact of the increasing wealth of women on their businesses for some time now. They recognize that women are earning more money than previous generations, and they also understand that with an aging clientele, inevitably the wealth they are currently managing will be passed on to heirs who will quite likely be a surviving wife or daughter. As the values of these women are reflected in their investments, the impact will be felt well beyond the financial industry as well.
Women’s Increasing Net Worth
Research done by the Boston Consulting Group showed that 30% of all private wealth was owned by women. The amount of money held by women grew from $34 trillion to $51 trillion between 2010 and 2015 and is expected to reach $72 trillion by 2020.
Women’s Investments Reflect Their Values
As financial firms have begun to observe the investing behavior patterns of women, they have seen that women are much more concerned with investments reflecting their value system than men who tend to concentrate more on performance and returns. Studies have shown that women are interested in investing in companies that have a good environmental record, and companies with forward thinking policies regarding women’s issues. This has caused a rise in gender lens investing with funds like State Street’s SHE-ETF becoming more popular on Wall Street. Some asset managers are urging firms to provide more gender related data such as equitable pay, attrition rates, talent management, and cultural data like sexual harassment in the workplace.
Gender Lens Investing
Gender lens investing is focused on financing companies who hire a large percentage of women, whose products and services benefit women and girls, who have family friendly corporate policies, who have a greater number of female executives, board members and managers, and businesses that are owned by women. As of June 2017, the amount of assets in these funds has grown to $910 million a 41% increase according to research conducted by Veris Wealth Partners. The number of investment strategies used by gender lens funds has also grown significantly in recent years with some directing investment dollars to many emerging markets and in turn having a positive impact on women worldwide.
The Bottom Line
A study conducted by Credit Suisse in 2012 showed that companies with at least one female board member performed 26% better than companies with no females on their board. Companies with a representation of diverse views allows them to be more agile and perform better. So, the bottom line is not only good performance, but also an increase in investment dollars that are benefiting women all over the world.
—Davenport Laroche, Headquartered in Hong Kong