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Wealth Planning For Women

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Why Gender Lens Investing is Good for the World— and Your Portfolio

The movement toward greater gender equality is creating benefits at every level of society. And investors are taking note

"It's a way to leverage the market to support progress towards gender equality—in the workplace, the supply chain, the consumer market, and elsewhere." 

Jackie VanderBrug Investment Strategist and Co-chair of the Impact Investing Council, Global Wealth and Investment Management Chief Investment Office

WITH GENDER EQUALITY AND DIVERSITY under increasing scrutiny today, a growing number of people are investigating how to create gender-related change through their investments. Many are turning to an approach called gender lens investing. Others may have heard about it but are unsure what it is and what potential investment advantages it might offer. According to Jackie VanderBrug, investment strategist and co-chair of the Impact Investing Council in the Global Wealth and Investment Management Chief Investment office (GWIM CIO), gender lens investing is the integration of gender into investment analysis, with two main goals in mind: to make the world a more equitable place and to make a profit. "It's a way to leverage the market to support progress towards gender equality—in the workplace, the supply chain, the consumer market, and elsewhere," she says. "And simultaneously it's a way to identify areas of opportunity in the search for enhanced investment returns, sustainable growth and lower risk." Check out the video from the Economist Panel on Gender Lens Investing featuring Jackie VanderBrug

(Music)

RON CORDES: People aren't really informed as to what Gender Lens Investing is and so I think that they make assumptions, perhaps with very little information.

JACKIE VANDERBURG: Gender Lens Investing is not small, soft, and pink. It's that deliberate integration of gender-based data into financial analysis, with the expectation of finding additional opportunities and uncovering and mitigating risks.  

RON CORDES: People will say to me, well, gender lens investing, so that's this ETF.  Well, it's like saying impact investing, that's this microfinance fund. It’s part of it, but it is much broader.  

ERIKA KARP:  Diversity is painful.  It's messy, but it works.  And so within organizations, again when you go deep, the issue of women on boards, the number of women on executive teams, that’s critical and it's easy to count but it's not enough. 

JACKIE VANDERBRUG:

The research is that 50% of women in America are not satisfied with their relationship with their advisor, and         50% of women in America would like to invest in gender         diverse companies…so the conversations that Erica is    having need to continue. But as more companies report gender diverse data, we can move beyond what she would say, counting women, to really understanding that DNA.  And the research is coming back strong again to embrace diversity of approaches here.

JACKIE VANDERBRUG: And then lastly, there's a lot going on in term of gendered data. So this is harder to get your hands around, but think about software.  Microsoft's got a whole lot of work going on around the gendered aspects of software development, and how to create software that doesn't have gendered biases. 

And there's lots of other work in that space, but those companies that are using gendered analysis in terms of data and products that then better work for all of us. It's not creating pink products, it's creating products that better work for everyone.  

RON CORDES: We have disproportionally had investments in women led companies in our private equity portfolio, not because they're women, but because they're totally brilliant, kick-ass CEOs.  They just happen to be women and what's interesting is to me it's a virtuous circle.  It's not about giving up return.  It's about putting ourselves in a position where we can outperform and invest in women at the same time.  

JACKIE VANDERBRUG:  I believe globally the economic power of women is growing faster than we as investors understand. Sixty-five countries in the last two years changed the legal status of rights for women in terms of their economic participation. All of that matters to companies that are operating around the world.  

  …so I would say is take one thing that you heard up here that fits with your particular situation, your passion, the way that you see the economy going, and decide to take a step.  And that could be a simple as starting to ask more questions in your due diligence, it could be asking your investment advisor how is it that my portfolio has exposure to the growing economic power of women.

 

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It's More than Philanthropy

Perhaps it's no surprise that some investors equate the idea of investing to improve society with philanthropy, which generally does not involve financial returns. So, when it comes gender and investing, it's important to stress the "making a profit" side of the equation. Indeed, gender lens investing is considered to be a subset of impact investing, which itself is often described as "doing good while doing well." That is, investing to make a positive social or environmental change while receiving a return on your investment.

How you can Make a Difference

Consumers, corporations and investors seeking to support progress on gender-related issues can help effect change in a number of areas.

Consumers, especially women, who control up to 80% of all consumer purchases, can choose to buy from companies owned by women or that are addressing gender issues.

Corporations can be more inclusive in hiring, branding and product development, potentially improving their standing in the marketplace, especially among women consumers. A global consumer products company, for instance, recently announced it would drop sexist stereotypes from its advertising.

Investors can analyze gender related data, pinpointing those companies that are making progress in this area and those that are not. They may also engage in gender analysis as a way to strengthen a portfolio, increase diversification and fine-tune risk.

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