Gender Diverse Investing: A Morning with Diana van Maasdijk
Q. What does Equileap do?
A. Equileap creates a financial index for gender-diverse exchange-traded funds (ETFs). What that means is that our organization uses research to evaluate over 3,000 companies around the world on how well they perform on measures that indicate progressive gender-diverse policies and practices. Some of the measures are parental leave, equal pay for equal work and women in leadership positions.
Q. How does Equileap qualify what is in-and-out of the index?
A. There are up to 35 points that can be achieved by any company, but the top organizations are scoring just 19 points; while organizations that lag behind score an average of six points. Present day, there are just 150 companies that make it into our North America Index. Of those, 15 come from Canada and some of the organizations include BMO, ScotiaBank, Intact and Sunlife.
Q. Does the financial sector dominate the Canadian contribution to the index?
A. The financial sector is the largest represented sector in the index, with 13 per cent, but it does not dominate. This is a well-balanced index with 10 different sectors represented.
Q. How can investors make money with gender-diverse investing?
A. Companies that are gender-diverse have demonstrated they are forward-thinking. Therefore, their performance tends to outperform non-gender-diverse organizations. Most of the organizations that make up the North American Index are large, blue-chip, high dividend paying companies with market capitalizations over $70 billion. That means this index acts a lot like those in a traditional dividend index or mutual fund.
Q. Your North American Equileap Index is being used in the new gender-diverse ETF HERS. What are the challenges with gender-diverse ETFs?
A. Getting the word out on the effectiveness and profitability of gender-diverse ETFs is key. Right now, these kinds of ETFs can be seen as “niche”, but their performance is actually higher than comparable North American dividend mutual funds. In my opinion the business case is strong and clear. From a personal perspective, investing with a gender-diverse lens is the way of the future and allows investors to support equality of both genders. The other important aspect to adoption is greater transparency of companies to disclose their gender-diverse policies and practices. Currently, disclosure is a challenge.