Diversification and gender equality in the workplace remains a marquee issue at companies of all stripes, particularly at those that are publicly traded.
As such, there are related investment implications that are being amplified as more market participants demand corporations prioritize diversity, equity, and inclusion. Some exchange traded funds get to the heart of those matters, at least from an investment perspective. That group includes the Calvert US Large-Cap Diversity, Equity and Inclusion Index ETF (CDEI ).
The actively managed CDEI provides investors with exposure to domestic large-cap firms that the issuer “believes are successfully managing diversity, equity and inclusion (DEI) issues.” That methodology is relevant at a time when data suggests women have ground to make up in the workforce following headwinds caused by the coronavirus pandemic.
Gender Gaps Abound
In a recent op-ed for Barron’s, Mary Hayes and Nela Richardson of the ADP Research Institute noted that while women currently make up less than half of the overall workforce, they represent 56% of part-time workers. That’s problematic, because many women are willing and able to take on full-time roles, and part-time work usually implies lower compensation.
“The gender gap in hours worked also has widened. The typical woman worked 35 hours a week in September, two hours less than she did in February 2020. The typical workweek for men has remained unchanged at 40 hours over the past four years,” observed the authors. ”Women are earning less than men, among prime-age workers, because of that gap in hours. Women in that group also earn less per hour than comparable men. For women 35 to 55, their earnings fall to 73% of what men earn.”
While CDEI isn’t a dedicated gender lens investing strategy, the ETF’s sector exposures are relevant in terms of the conversation about women in the workforce. For example, Hayes and Richardson noted some industries with volatile hiring patterns contribute to job loss or elevated part-time participation among women. Travel & leisure is one of the worst offenders, but consumer cyclical stocks account for less than 6% of the CDEI portfolio.
Still, there’s work to be done in terms of boosting female labor force participation. Much of it boils down to the companies themselves.
“Organizations have the ability to slow the revolving door of workers. They can build trust and ensure that pay is equitable, for starters. Building trust between workers and their supervisors or management can nurture an employee’s desire to stay with the organization,” concluded Hayes and Richardson.
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