New report highlights new launches and increases in AUM amid pandemic’s adverse economic impact on women
The past year has been a watershed moment for ESG funds, which saw increased interest from investors as they showed remarkable resilience amid the pandemic-driven downturn. And according to a recent report, a similar story played out with respect to gender-lens investment (GLI) funds.
According to a new paper from Parallelle Finance, publicly traded gender lens equity funds (GLEFs) ended 2020 with US$2.67 billion in AUM, which included US$106 million in three new funds that were launched during the year. Among funds that were on Parallelle’s radar by the end of 2019, just one closed in the face of last year’s economic storms, while AUM growth in GLEFs reached 40% throughout 2020.
Focusing on funds offered to individual investors, the report counted 12 global equity funds and 16 regional equity funds. Funds within this subset were listed in the U.S., Canada, the U.K., the E.U., South Korea, and Japan. Collectively, GLEFs have a reported composition of 48% female management, compared to 14% of fund managers globally and 11% in the U.S.
Among the top 12 GLEFs by AUM by the end of 2020, there was the RBC Vision Women’s Leadership MSCI Canada Index ETF (US$94 million), the Desjardins SocieTerra Diversity Fund (US$86 million), and the BMO Women in Leadership Fund (US$54 million). But they all paled in comparison to the Pax Ellevate Global Women’s Leadership Fund (investor class), the largest GLEF, which boasted an AUM of US$7480 million.
Splitting the spectrum according to sector revealed no clear winners on gender equality, according to the report. The top sector weightings for GLEFs went to information technology and financial services, two spaces with well-researched shortfalls in gender equality.
“The pandemic-related economic downturn of 2020 has visited a uniquely negative impact on women in the global economy,” the Parallelle report said. “The most vivid illustration is in the global care economy, which is comprised of US$10.8 trillion in unpaid labor, performed mostly by women.”
Other notable areas of impact, according to the report, came from overwhelming job losses sustained by women, as well as a predominance of female workers in low-paying essential jobs. Female members from minority groups, it added, ended 2020 with unemployment rates larger than those for men and women overall, raising a potential threat to hard-won progress in workplace diversity.
And while gender-lens investing funds had a mixed showing immediately following the COVID-19 downturn, they seem to have turned things around. As of December 31, 2020, the U.S.-listed Impact Shares YWCA Women’s Empowerment ETF came out on top with a 34.06% one-year return when measured in U.S. dollars. The BMO Women in Leadership Fund and BMO Women in Leadership Fund ETF netted returns of 12.70% and 13.99%, respectively, in Canadian dollar terms. The Mackenzie Global Leadership Impact ETF, meanwhile, had a reported one-year performance of 11% in Canadian dollars.
“AUM in the gender lens equity and fixed income sectors is positioned for 2021 growth,” Parallelle said in the report, noting planned launches that include a US$2.9 billion institutional equity portfolio and an emerging-markets bond fund focused on gender equality in the least developed countries. “Individual investors have a growing number of funds in which to invest in a long-term women-focused recovery from the pandemic and downturn.”