Gender Lens Investing: What, Why, How?

What is gender lens investing?

In short, gender lens investing is investing in women, for women, and by women.

Investing IN women – An investment strategy which seeks to achieve a market rate of return by investing in businesses demonstrating the promotion of equal opportunities for women as employees, business owners, or consumers.

Investing FOR women – Women and their financial advisers deploying capital to grow wealth while investing their values.

Investing BY women – Investors advocating for and engaging women in financial services and portfolio management leadership.

Why gender lens investing?

In the global investment landscape, gender lens investing seeks to address a persistent global gender gap of unequal representation for women in corporate and political leadership, a widespread pay divide, and uneven progress for women and girls in education, health care, and economic opportunity. In 2015, McKinsey estimated that fully closing the gender gap would add $28 trillion to global GDP by 2025. Halfway there, work remains on all fronts. The World Economic Forum recently concluded that closing the global gender gap will require 257 years at the current pace.

Over the last 15 years, a body of research has consistently demonstrated that companies with relatively stronger women-in-leadership (WIL) metrics deliver superior measurable performance in several areas, including higher returns on capital, better productivity, and higher stock price performance. This evidence has led to the development of public and private gender lens investment vehicles.

In order to capture deeper measures of gender diversity, and to direct research toward areas where equity is lagging, many of these funds are also focusing on a broader set of corporate gender equity metrics, including pay equity, supplier diversity, and benefits profiles. There is growing research that companies who don’t measure up on WIL and additional equality metrics will underperform.  

How can an individual invest with a gender lens?

On the public equities side, a range of gender lens mutual funds and ETFs (GLEFs) are available to individual investors. These were founded on evidence of superior performance by companies with higher women-in-leadership (WIL) metrics. See the latest quarterly performance of these funds here and key stats here. This suite includes mutual funds, ETFs, SICAVs, one ETN, and unit trusts. Some provide several share classes and multiple exchange listings. All are multi-cap or larger-cap in style. The funds are listed by size within two geographical groups, global equity and regional/country equity. There are also an overview of gender lens fixed income funds and instruments (GLFIs) available here

What is gender lens finance?

Gender lens finance encompasses a broader continuum of global funding to support gender equality, including philanthropy, social impact investing, and development finance. Gender lens finance encompasses a broad continuum of global funding to support gender equality, including philanthropy, social impact investing, development finance, and public-private partnerships. These vehicles and initiatives may target a social impact return, including below market rate of return, no return on investment, or even no return of principal. These initiatives help address equality gaps and are often the groundwork for market return-based gender lens investing. Gender lens finance encompasses a broader continuum of global funding to support gender equality, including philanthropy, social impact investing, and development finance.

What is inclusive gender equality?

Inclusive gender equality is deliberate and measurable gender equity inclusive of race, ethnicity, sexual orientation, gender identity, ability, religion, and socio-economic background.