Gender lens equity funds grow assets to $2.67bn in 2020 as tech exposure helps performance – Investment Week


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Gender lens equity funds have 48% female management

Gender lens equity funds have 48% female management

Assets under management (AUM) in gender lens equity funds grew 40% in 2020 to $2.67bn boosted by $106m in new funds launched during the year, as well as the performance of the technology sector, according to new research.

In its Gender Lens Investing 2021 report, Parallelle Finance attributed the double-digit gains recorded by most publicly-traded gender lens equity funds last year to their allocations to information technology, a sector which “strongly outperformed” for the year.

The report revealed there were “no clear winners on gender equality” when it came to sectors but that information technology and financial services, both sectors with “well-researched gaps in gender equality”, were among the top sector weightings in these funds in 2020.

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It cited Catalyst data which indicates that women represent only 24% of board directors at major financial firms, and only 12% of CFOs in large-cap financial services companies, while just 3% of technology CEOs are women, and 20% of CFO and 16% of senior manager positions are held by women.

“Directing capital toward companies and sectors characterised by women in low-paying roles is one way that gender lens funds can help drive a women-focused recovery,” Parallelle Finance said.

The company found that Microsoft was the top holding, found in 11 gender lens equity funds, followed by Visa, a holding in six of the funds and Estee Lauder, held by five of the funds.

It identified 12 global equity funds and 16 regional equity funds available to individual investors, with the Pax Ellevate Global Women’s Leadership fund the largest of these at $748m in AUM.

At 13.7%, this fund had the second-highest absolute returns for the 12-month period in the global equity segment, behind the AXA World Funds Framlington Women Empowerment fund, which recorded the strongest absolute performance of 18.4% for the 12-month period.

In US equities, the Impact Shares YWCA Women’s Empowerment ETF, with a 34.9% allocation to technology stocks, reported a gain of 34.1% for the year, the highest in the asset class.

Among the three funds launched during 2020 were the Desjardins SocieTerra Diversity fund in March 2020, which ended the year with $85.7m in AUM, and the Adasina Social Justice All Cap Global ETF unveiled in December and ending the year with AUM of $20m. Only one fund closed during the period.

Parallel Finance found that as an asset class, the gender lens equity funds group had a much higher-than-average representation of female portfolio managers, with 48% female management. By comparison, women comprise 14% of fund managers globally and 11% in the US, according to Morningstar data.

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Parallelle Finance said that public sector gender lens investing “appears to be on an expansion path” and that AUM in the gender lens equity and fixed income sectors is “positioned for 2021 growth”.

It added that planned launches this year range from a $2.9bn institutional equity portfolio, to an emerging markets bond fund investing in gender equality in the least developed countries.

But the report also highlighted the impact of Covid-19 on women in the global economy, and said the most “vivid illustration” of this is in the global care economy, which is comprised of $10.8trn in unpaid labour, performed mostly by women.

Unpaid caregiving, which keeps many women from the workforce, increased during the pandemic, as schools and other educational facilities shut down.

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