Investing for Impact in Women & Gender Diversity - SDG5
Today is International Women's Day (IWD). It was first established back in 1911 in honour of 15,000 women who took to the streets in New York in 1908 protesting for shorter hours, better pay and voting rights. IWD is a great time to reflect on how far we’ve come towards gender equality, and also raise awareness on how far we have left to go.
In 2015, the Sustainable Development Goals (SDG's) were established to set out a roadmap of how we can solve some of the world's biggest problems. There are 17 high level goals, of which, SDG5 highlights the issue of Gender Equality. It has been pointed out that finance has a critical role to play in achieving the SDGs, by channelling capital towards solutions and driving improvement through engagement with companies.
According to various research, investments in women have a ripple effect into the world around them which speeds up development, helps overcome poverty, reduces inequalities and improves children’s nutrition, & health. Further research has shown that improving equality in women's education can curb population growth - hence reducing the impact on the environment.
There are many ways that we can invest in women, from supporting women in under-privileged communities via Kiva.org, to investing in women entrepreneurs via SheeO , to investing in corporate women's leadership via ETF's. In fact, according to various research, companies led by women have a long history of outperformance. Per Bank of America Merrill Lynch, gender diversity can boost return on equity, profit, dividends and market cap at a lower risk rate. Companies with greater diversity on their boards have also experienced lower volatility in earnings and dividends.
Consequently, several ETF's, have emerged which specialize in investing in women leadership, such as:
SPDR SSGA Gender Diversity Index ETF SHE
This ETF offers exposure to U.S. companies that demonstrate greater gender diversity within senior leadership than other firms in their sector by tracking the SSGA Gender Diversity Index.
Impact Shares YWCA Womens Empowerment ETF WOMN
This ETF tracks the Morningstar Women’s Empowerment Index, which is designed to provide exposure to companies worldwide with strong policies and practices in support of women’s empowerment and gender equality.
Barclays Women in Leadership ETN WIL
This product is linked to the performance of the Barclays Women in Leadership Total Return USD Index, which provides exposure to U.S.-based companies that satisfy one or both of the gender diversity criteria of having a female chief executive officer or having at least 25% female members on the board of directors.
Fidelity Women's Leadership Fund ETF FWOMX
Fidelity has also created an actively managed, US equity fund that invests primarily in companies that prioritize and advance women's leadership, Fidelity Women's Leadership Fund (FWOMX)
Although it's encouraging to see a growing awareness and momentum towards gender equality, there is still a long way to go before gender equality is fully achieved. Using your money as a force for good is one way to support this important area.
Please note that this information is general in nature and doesn't take into consideration your personal circumstances. Make sure you seek advice before taking any financial action