The fund, managed by Julie Bech and Audhild Asheim Aabø, aims to capitalise on research revealing higher equity market returns are being achieved by companies at the forefront of gender diversity.
Gender diversity has become a global sustainability theme, as evidenced by the fifth UN Sustainable Development Goal’s aim to ‘achieve gender equality and empower all women and girls’.
Despite these efforts, there remains a major gender diversity gap across the corporate world, as less than 4% of the largest 500 companies on the planet have a woman CEO and just 7% of boards are gender diverse.
Investors are beginning to note the effects of gender diversity on corporate performance – with improved gender diversity being linked to broadened perspectives and improved decision making.
The fund screens a universe of about 1,700 companies where women hold at least a third of senior management roles
According to the DDI Global Leadership Forecast 2018, better gender diversity results in 1.4x sustained profitable growth, 1.5x stronger corporate culture and 1.7x leadership strength.
The Nordea 1 – Global Gender Diversity Fund has a universe of approximately 1,700 companies displaying fair gender diversity representation, where women hold at least a third of senior management roles.
This universe is then screened for liquidity and other qualitative assessments – such as valuation, growth, quality and earnings. ESG criteria – such as the exclusion of companies involved in breaches of international law and norms on environmental protection, human rights and labour standards – are also incorporated.
Of the remaining pool of about 350 stocks, the portfolio managers undertake a qualitative assessment and a Gender Diversity Score is assigned. This score is based on gender diversity and equality reporting, percentage of females in top management, promotion and career development opportunities, as well as gender policies – such as equal opportunities and the gender pay gap. From this, the portfolio managers assemble a portfolio of 80 to 100 compellingly-valued stocks at the forefront of gender diversity.
“We are focused on identifying global companies displaying fair gender representation in senior management, executive management and at board level,” Bech said. “We believe gender diversity drives a company’s profitability, thus companies promoting it should be rewarded. While this is a social issue, it is also correlated with business success.”