Gender Lens Investing


Last night, I attended the CFA Society of San Francisco’s Women Initiative Network’s event on Gender Lens Investing. It was an enlightening event – not only was there a great group of women in attendance but also for the first time, I realized how many women CFAs there are in San Francisco. Where have these ladies been?!?! Is everyone hanging out without me?

Extensive (albeit rather gloomy!) research was shared by Andrea Davis, Associate Director of the Clayman Institute for Gender Research, affiliated with Stanford University and... an ex-fire fighter! Her background as a historian and sociologist provided a fascinating view into unconscious gender bias. Perhaps the most revealing (and humbling) lesson for me was that both men and women practice this “unconscious gender bias”. Andrea sited a riddle – that I am embarrassed to have only gotten right on my second try.

Here is the riddle: A man is driving his son to school. They unfortunately get into an accident and the man dies. The son is rushed to the hospital and when he arrives for emergency surgery, the surgeon says, "I can’t operate on this boy, he is my son!" How is this possible?

Answer: My first guess, being from San Francisco, was that the parents were gay men. A second later (and while it was only a second later, I swear!) I thought, Wait a minute - I could be the surgeon! Apparently, this riddle was part of a research project conducted by Mikaela Wapman and Deborah Belle at Boston University. The researchers ran the riddle by two groups: 197 BU psychology students and 103 children, ages 7 to 17. In both groups, only a small minority of the group—15 percent of the children and 14 percent of the BU students—came up with the mom’s-the-surgeon answer. Andrea’s sharing of this piece of research was such an “ah-ha” moment for me and made me realize that no matter how progressive I am in my actions, I, too, am participating in this “unconscious gender bias.”

The second speaker was Eve Ellis, a Portfolio Manager at Morgan Stanley, whom about 18 months ago launched the Parity Portfolio Strategy. Eve’s investment strategy is the result of her research on a strong correlation between significant female representation on public company boards and in senior leadership with the companies’ financial strength. Eve is hoping that through the Parity Portfolio Strategy she will provide investors with an opportunity to create impact through their investments, and aligning them with their values. Her passion for her work was so inspiring!

The Parity Portfolio Strategy triggered a few food for thoughts for me:
1) Some socially responsible investing strategies suggest that environmental, social and governance (ESG) factors are actually leading to an outperformance by companies relative to their peers, who lack those ESG factors. If indeed this investment thesis is true, then women on boards and in senior leadership may be a factor driving outperformance.
2) The most common feedback from male investors on the Parity Portfolio Strategy was “I could have told you so” or “I am not surprised."
3) In Eve’s research for companies qualifying for the Parity Portfolio Strategy, sectors such as consumer discretionary and healthcare are well represented, while energy companies are least represented. While the research at this stage is still based on correlations, as opposed to a casual relationship, the strategy definitely sparked a lot of CFAs’ interest!

Overall, such an enlightening event! It has really inspired me to focus on my book chapter, in hopes of encouraging more women to become angel investors!

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