Environmental, social, and governance (ESG) investing is rapidly evolving and much of that evolution includes an increased emphasis on social and governance issues. One way for investors to get on board with that trend is to focus on gender-driven or gender lens investing, which is accessible via select exchange traded funds, including the IQ Engender Equality ETF (EQUL )+.
EQUL debuted in October 2021 and the fund supports the issuer’s contributions to the Girls Who Code. With the gender equality theme gaining momentum and more data and studies supporting the notion that companies that embrace gender diversification do right by investors, EQUL could be ready to step into the limelight in 2023.
“The lack of gender equity has been a systemic issue in the business and investment community throughout its existence, but, for some time now, there is growing evidence that pursuing gender equity as an investor will have positive benefits for the investment, business, and society,” according to the Gender Impact Investing Network.
EQUL offers investors an opportunity for a less environmental-dependent ESG addition to their portfolios, but one that isn’t overly thematic. The ETF’s 75 holdings are primarily familiar, domestic large-cap equities, including Salesforce.com (NYSE: CRM), Paypal (NASDAQ: PYPL), and Verizon Communications (NYSE: VZ).
As noted above, companies that emphasize better gender diversity and equal pay often deliver for investors. Those points are also crucial when it comes to attracting and retaining top talent,
“Companies with women in executive management repeatedly outperform companies that have no women in senior roles. This is the same case for companies with women on their boards,” added GIIN. “With 50% of the world’s population being women, this group is underrepresented in the workforce. This represents an underutilized pool of talent, and limits diversity within an organization.”
EQUL could also be at the right place at the right time in 2023 because with environmental and sustainability being in the spotlight for so many years, asset allocators are demanding more emphasis on the “S” and the “G” in ESG.
“Globally the purchasing power of women is growing, and companies and investors are taking note of the opportunity in accessing this capital. Furthermore, women are investors, a growing segment of which apply gender lens to their investment strategies. Entrepreneurs who can effectively demonstrate their ability to empower women will have greater success accessing these capital sources than those who cannot,” concluded GIIN.
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