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How to Find Gender Equality Mutual Funds and ETFs

Gender equality investors got an early holiday present this week: a new free fund screening tool enabling them to evaluate the gender equality of their mutual funds and ETFs.

The tool, created by As You Sow, a nonprofit promoting environmental and social corporate responsibility through shareholder advocacy, coalition building and innovative legal strategies, in collaboration with Equipleap, a gender equality data and insight provider in Amsterdam and London, enables investors to view and compare the gender equality score of the 5,000 most commonly-held U.S. mutual funds and ETFs in U.S. 401(k) plans. It’s the fifth socially responsible screening tool As You Sow has created, joining screens for fossil-free funds, weapons-free funds, deforestation-free funds and tobacco-free funds.

[See: 7 Things You Need to Understand About Your 401(k).]

The tools are designed to meet the needs of a growing cohort of socially responsible investors.

“We believe there is a wave building that will become a tsunami, particularly with women who want to invest their money to create a world they want to live in,” says Andrew Behar, chief executive officer of As You Sow in Oakland, California.

Socially responsible investing grew by more than 38 percent between 2016 and 2018, according to The Forum for Sustainable and Responsible Investing (US-SIF). Today, more than one-quarter of professionally managed dollars are invested in accordance with SRI practices. A decade ago, that number was $1 in every $12.

But investors can’t make socially responsible investment decisions if they don’t know what they own.

“We realized investors were signing pledges to invest their values but no one knew what their portfolios or 401(k)s actually held,” Behar says.

With mutual funds and ETFs containing hundreds to thousands of stocks, trying to uncover the true social responsibility of each fund is likely beyond even the most devoted SRI investor’s scope.

So, As You Sow began doing the legwork for investors. They started with fossil-free funds and continued working through the social and environmental issues most important to investors.

“Gender equality was one we wanted to do from the beginning but until now the data wasn’t there,” Behar says.

[See: 8 Ways to Build a Low-Cost Portfolio for Social Change.]

The only data robust enough to create a ranking tool was the number of women on company boards, which they didn’t feel was reflective of the whole gender equality issue — until Equileap entered the picture.

The registered charity gathered data on 12 key performance indicators that shape a company’s gender diversity policy, from the number of women in executive positions to maternity and paternity leave, sexual harassment policies and human rights policies. As You Sow then aggregated those 12 metrics into an overall fund gender equality score.

The result is investors “can now compare fund to fund how they rate on gender issues” with a simple search, Behar says.

You can search by fund name, ticker symbol or asset manager name. Or, if you don’t know what you’re looking for, you can filter by fund categories, families and types, and if it’s diversified or labeled as socially responsible. You can also compare major fund managers to see how their mutual funds stack up on gender equality.

Results show the overall gender lens score, the fund’s overall rank across all funds and its peer rank. You can also see if the fund has a socially responsible mandate or a member of US-SIF. Clicking on a fund reveals the fund’s gender balance, defined by having a men-to-women ratio between 40 and 50 percent, and the 10 top and bottom gender-scoring holdings. Fund holdings are updated monthly. Equileap company scores are updated annually.

While funds are scored for overall gender equality out of 100 points, currently the best mutual fund in the entire system is only a 67, Behar says, which shows how far companies have to go on gender equality issues. But he believes tools like the gender equality funds screener will bring about that change.

[See: 8 Global ESG Funds to Diversify Your Sustainable Portfolio.]

“Our theory of change is that corporations are the most powerful entities in the world. When you shift a corporation, you shift not only the people within the corporation but the communities and consumers they serve, as well as their shareholders and entire supply chain,” Behar says. “When people invest their values, it actually shifts the world because it shifts capital, and where capital goes, those are the companies that will prosper.”

The gender equality funds tool is available to investors at gendereqaulityfunds.org. As You Sow’s other screening tools can be found at asyousow.org/invest-your-values.

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How to Find Gender Equality Mutual Funds and ETFs originally appeared on usnews.com



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