For nearly two decades ThirtyNorth Investments has successfully provided high net-worth clients with objective and independent investment guidance. As a majority-women owned firm and as women in asset management, we felt perplexed at the significant gender disparity that remains in the upper levels of corporate leadership. Indeed research confirms that globally, women make up only 13.8% of senior leadership in companies.1
At the same time, new research confirmed what we intuitively knew, that a strong correlation exists between greater gender diversity and corporate performance. A study of 3,400 companies by Credit Suisse in 2016 found empirical evidence that companies with at least one woman on their board delivered excess returns at a CAGR of 3.5% from 2006 to 2016 over companies with no women on their boards.2 In addition, a study by research and advisory firm Catalyst found that more gender diverse boards aligned with stronger financial performance across different industries on metrics such as Return on Equity, Return on Sales & Return on Invested Capital.3
Despite research that linked gender diversity at the top with stronger corporate performance, we saw few investment options that leveraged this compelling research. In fact we saw no strategies that leveraged the gender diversity research to enhance an investment thesis. This is how the Women Impact Strategy Separately Managed Account was born. This Account is a carefully crafted portfolio of fifty companies that are leaders in gender representation within Boards of Directors and executive teams.
We started with a universe of 415 stocks listed on the MSCI Global Women’s Index and applied a rigorous screening process that considered economic performance indicators of size, value and profitability. We then applied the gender lens screen, seeking companies that are leaders in gender representation at the top. The quantitative ranking and social impact screen is then balanced to ensure an account that mirrors the sector weighting of the Russell 3000. The account is an all-cap core equity holding.
What makes the Women Impact Strategy truly unique is that the social impact screen here (investing in companies that are leaders in gender representation) potentially enhances stock performance. Indeed since the Account’s inception on April 7, 2016, it has consistently outperformed the Russell 3000 Index net of fees. While past performance does not guarantee future returns, we at ThirtyNorth firmly believe that the Women Impact Strategy will prove a win-win for both investors and in helping move the needle on corporate gender diversity that will benefit companies themselves and the consumers they serve.
We feel incredibly privileged to introduce this product to you and sincerely thank you for your interest. Our team possesses deep investment industry expertise, an innovative, female-led perspective and a genuine passion for gender lens investing.
Click here to download and read our whitepaper: Impact of Women in Corporate Leadership.