Like many industries, women are disproportionately represented in finance. The investment world is predominantly composed of men. The banking sector is also heavily male-dominated. While there are millionaire female investors, traders, bankers, and the like, it’s still mostly a male-dominated sector.
But it doesn’t have to be.
Leading investment firms and banks have made great progress in the last few years to be infinitely more inclusive than ever before. From mandating the hiring of female executives to including more women on their boards of directors. While there are still years of work to be done to bring equality in the board room, workplace, and trading floors, things are a whole lot better than, say, what you saw depicted in The Wolf of Wall Street.
Fortunately, you can actually invest in this progress. There are a few choice index and mutual impact funds that support the progress of women in all workplaces. Sure, these funds afford investors the potential to make gains in their portfolios, but they’re gains with a tremendous social benefit. If you’ve ever wanted to invest but wanted to support gender equality in the workplace, here’s how to do just that.
Bloomberg recently launched the Gender Equality Index to track the progress of gender equality in the workplace.
This index gives a weighted average to 52 firms that explicitly committed to creating equal workplaces. Companies like American Express ($AXP), Bank of America ($BAC), and 50 other publicly traded have all made this commitment. While you must have a Bloomberg terminal to access this index and its performance over time, you can also simply track the progress of each company listed on the index and invest in them individually to support this endeavor.
State Street, a financial services company, manages an ETF that tracks companies supporting equality in the workplace.
Not unlike $EQLT, State Street’s Gender Diversity Index ETF ($SHE) invests in companies with females CEOs, board members, and/or senior-level executives. As per a study by MSCI in 2015, companies with three or more female board members do better than the average company by 36%. Buying into this fund (like all other ETFs) lets you invest in small percentages of each company. When the companies perform well as a whole, the value of $SHE goes up, and vice versa. Investments in $SHE directly benefit these companies, showing faith in their sound and inclusive choices to bring equality to their workplace.
Pax and former bank executive Sallie L. Krawhcheck run a mutual fund investing in companies with female executives.
The mutual fund, called Pax Ellevate Global Women’s Index Fund, trades differently from exchange-traded funds. The Pax fund, which trades under $PXWEX, only updates its price once a day (in the evening), and it has higher fees than an ETF. Investing in $PXWEX, however, lets you accomplish more or less the same goal as $SHE by investing in companies offering a solution to the male-dominated business world.
If you want to grow your money and invest like a feminist, these two funds are the best way to support the cause. By owning stock in companies that support powerful women, you are supporting those company’s decisions to continue doing just that. Sure, you will likely earn money on top of your original investment as $SHE and $PXWEX are up 10.67% and 12.08% in the last year, respectively. Yet you’re not just investing in a company for the sake of making a profit. You’re investing to make a difference.