There is no easy solution to the underrepresentation of women in financial services, or any other industry, but one RIA has taken matters into its owns hands with the launch of a separately managed account (SMA) focused on gender diversity.
ThirtyNorth Investments unveiled the SMA last year and it is run by the firm’s managing principal Suzanne Mestayer and chief investment officer Blair duQuesnay, who also oversees the manager and ETF due diligence at the $130 million RIA.
DuQuesnay told Citywire: ‘We are two women asset managers... investing in companies that have more women in leadership. The number of women as investment managemers is so small still.’
According to a report by Morningstar, less than 10% of all US fund managers are women, who run only about 2% of the industry’s assets and open-end funds. By contrast, men exclusively run about 74% of the industry’s assets and 78% of funds.
The ThirtyNorth SMA aims to invest in companies led by women, or those with better than average gender diversity on their boards.
The Women Impact Strategy is an equity portfolio of around 50 holdings, with stocks of an average market cap of $18.5 billion.
On average companies in the strategy have women representing 30% of their board or executive suite.
‘The Women Impact Strategy is a portfolio of 50 companies that are leaders in the percentage of women on their board of directors and in their executive suite,’ said duQuesnay. ‘But we don’t stop there, there are some other index-based strategies that just screen for gender diversity and they market cap weight. We also look at factors. We look at size, value and profitability factors so we are in favor of smaller companies, lower valuations and higher profitability. We mix that with the gender diversity to buy a portfolio of 50 companies.'
Of the 50 stocks in the portfolio, four have women chief executives and seven women chairs.
The overall aim of the portfolio is to achieve long-term growth. Since it launched on July 4 2016 it is up 21.4% versus the Russell 3000’s 17.7%, according to data from the firm.
The SMA has its largest weighting to technology (17.8%), consumer discretionary (14.1%) and financials (13.7%) and healthcare (13.5%).
Top 10 holdings include media conglomerate Viacom, energy firm Encana and cyber security business Symantec.
DuQuesnay said the appetite for the SMA reflected a wider trend of greater demand for environmental, social and governance (ESG) funds.
‘Our women clients tend to really understand the ESG value proposition and understand that it’s a risk mitigation tool, it’s not about sacrificing return, you are actually looking to get the same or even better returns and then aligning their investments with their values,' she said.
Despite the huge interest in ESG on the institutional side, duQuesnay believes it still has a long way to go for high-net-worth and individual clients.
‘There are just not enough products, there are not enough assets in the products and I think this is just the tip of the iceberg for ESG for individual investors,’ she said.