As International Women's Month comes to a close, gender equality awareness is stronger than ever — and, as it turns out, important to look for when investing too.
Dr. Hedva Ber, Global Chief Operating Officer and Deputy CEO of eToro shares her thoughts today on why and how you should choose female led business for your next investment.
Research has shown that the more women in leadership positions that a company has, the higher the firm’s profitability. Women’s presence in corporate leadership also tends to enhance factors such as mentorship, collaboration, employee well-being, as well as diversity and inclusion initiative.
A 2019 study found that public companies with women at the helm — serving either as Chief Executive Officer or Chief Financial Officer — showed higher profits and stock price performance than those of companies with men in top positions.
So, if you’re starting your investment journey and wondering where to start, it’s worthwhile to factor female leadership into your decisions.
Here are five insights and pieces of advice for investors who have gender equality in mind:
1. Invest in companies who have boardroom diversity.
“Female leadership and boardroom diversity have proven advantages, not just for company culture, but also for business growth and development,” says eToro’s Deputy CEO and Global Chief Operating Officer (COO), Dr. Hedva Ber. “The impact of these factors over the long term is not just a stronger, more resilient business with better processes and fresher thinking, but, in turn, better results for investors.”
2. Support companies who are nurturing women in high-level positions.
As well as capitalising on investing in female-led companies on a financial level, investors can also be reassured they are supporting companies who are nurturing women and creating an environment that aids women in their career progression.
3. Seek out ready-made portfolios that exclusively feature women-led businesses. For example, the eToro FemaleLeadership Smart Portfolio helps investors to capitalise on, as well as support, corporate female leadership. The portfolio invests in companies with a significant number of women in executive and directorial positions, leading the way not only in equality and diversity, but also aiming for impressive growth.
4. The gender balanced boardrooms of today lead to the best-performing stocks of tomorrow.
Not everyone has the time to scrutinise the ongoing developments within each industry – it can seem overwhelming. With a ready-made, diversified portfolio of companies, the investment platform does the heavy lifting, and enables investors to engage with the companies they believe in, in a simple way. At least 40% pf the company executives and board of directors must be female to be considered for the FemaleLeadership Smart Portfolio.
5. A portfolio of female-led companies will naturally feature a diverse array of sectors.
Female-led companies create products and services that touch every facet of our day-to-day lives, offering investors exposure to leading companies from a variety of sectors and industries. Bundling together several assets under the same strategy and employing a passive investment approach, such portfolios offer long-term investment solutions that have diversified exposure.
