How can investors help close the gender wealth gap?

29 Mar 2023 - Channel Capital

Investing in companies and strategies that support gender equity can lead to better outcomes for women - without the need to sacrifice returns. How close is Australia to closing the gender gap for women in economic, health, and...

29 Mar 2023 - How can investors help close the gender wealth gap?

By: Channel Capital

How can investors help close the gender wealth gap?

Channel Capital

March 2023

Investing in companies and strategies that support gender equity can lead to better outcomes for women - without the need to sacrifice returns.

How close is Australia to closing the gender gap for women in economic, health, and leadership opportunities? Not as close as we could be, it turns out.

Australia ranked 43rd in the World Economic Forum's Gender Gap Index in 2022 - well behind New Zealand (4) and the Philippines (19) and trailing Ecuador and Bulgaria (41 and 42 respectively).ⁱ

When it comes to economic participation and opportunity, Australia ranks 39 out of 145 - not even in the top quartile.ⁱ

This underperformance is fuelled by a persistent gender wage gap and superannuation gap.² That superannuation gap is exacerbated by a superannuation system designed for full-time participation over a lifetime, when the reality is many women take time out of the paid workforce to look after their families.

And despite growing numbers of women accessing financial advice, women still score lower than men in financial literacy overall.³

There are a range of strategies to address financial gender equity - from financial literacy training and mentoring to providing better parental leave schemes in the workplace. Another valuable tool that can help close the gender wealth gap is investing with gender equity in mind. So what does this mean and how does it work?

INVESTING THROUGH A GENDER LENS

Gender lens investing aims to consciously promote gender equity by driving gender-informed investment decisions. It looks at how the entire investment process - from due diligence to ongoing management and then to exit - could affect gender issues. Ideally, gender lens investing should also be intersectional, considering factors such as race, class, LGBTIQA+ and ability.⁴

With gender lens investing, investment funds may put their capital into enterprises that promote gender equity. This could include investing in businesses that are owned or led by women, or which have gender targets for their board, management team, staff and supply chains.

A great example is the success story of employment services provider APM, founded by an aspiring female leader, Megan Wynne. Revolution Asset Management's flagship Australian and New Zealand private debt strategy has backed the business for many years by providing funding and enabling its growth. APM started in 1994 as a small team in Perth. Today, APM is an ASX listed international human services provider with locations across Australia, New Zealand, United Kingdom, Europe, North America, and Asia, supporting more than 2 million people each year of all ages to find employment and live a better quality of life, and in turn, making a real difference in the communities it serves.

Investment funds may also focus on enterprises that aim to better the lives of women and girls, or address issues that particularly affect women and girls. For example, in Australia, an increasing number of women are facing homelessness. Dedicated impact investment fund manager Conscious Investment Management's Impact Fund, seeks to address this inequality by investing in social and affordable housing.

In addition, investment funds may analyse potential investments by examining a company's vision or mission, organisational structure and culture, and how they encourage gender equity. They may screen investments using metrics such as gender quota targets for the board and management. And many take a thematic approach to investing that includes gender-equity goals.

Bell Asset Management has identified a KPI to measure and track progress of gender diversity within its portfolio versus its benchmark, as part of its ESG factors. As of 31 December 2022, 71.6% of its portfolio had more than 30% female representation on the respective boards of its portfolio companies, relative to the index having 58.6%. The global equities manager also engages directly with companies regarding gender diversity via proxy voting, which has the potential to improve the performance of the companies they invest in. Studies have shown that companies with more diverse boards tend to perform better financially than those with less diverse boards.

GOOD FOR EQUITY, GOOD FOR RETURNS

Gender-lens investing isn't only good for promoting equity. It's been shown to be positive for investment returns, too.

A recent study by McKinsey & Company found that enterprises with strong gender diversity are 25% more likely to be more profitable.⁶ Other studies confirm that businesses with gender-diverse teams tend to provide better returns and profits.⁷

Companies that actively seek to employ more women have a larger pool of talent to draw on. And workplaces with diverse teams tend to be more motivated and have better outcomes in retaining staff.⁸

As an increasing number of women become investors⁹ - and with women more likely to choose values-based investing than men* - it makes very good sense for companies to focus on gender equity. It's the right thing to do and could help drive better results for the business, investors and women more generally.

Equality or equity - is there a difference?

Equality is about treating everyone the same. But it doesn't recognise that many people start at a disadvantage due to factors including poverty, racism and sexism. In other words, not everyone has the same access to education, information, wealth and resources to succeed.

Equity on the other hand, aims to provide everyone with the resources they need to succeed. This can be achieved by strategies such as investment in education, housing and health for disadvantaged groups, increasing financial literacy among women, or supporting enterprises that champion an inclusive culture.

Sources:

^{1 World Economic Forum, Global Gender Gap Report 2022.}

^{2 WGEA, Gender Equality Scorecard 2022.}

^{3 Professor Alison Preston, Insights from HILDA Data, UWA Business School 2020.}

^{4 Abhilash Mudaliar, More than a zero sum game: Gender lens investing means we all do better. ProBono Australia}

^{5 Source: Bell Asset Management, 31 December 2022.}

^{6 McKinsey & Company Diversity wins: how inclusion matters, 2020.}

^{7 Michele Lerner, Future returns: Gender diversity offers investment strategy for impact and gains, Penta, 15 November 2022.}

^{8 Global Impact Investing, Network Gender lens investing initiative, 2019}

^{9 ASX, Australian investor study 2020}

^{*Cerulli Associates, Asset Owners See Diversity and Inclusion as the Most Critical Component of ESG Measurement among Managers, 17 November 2021.}

Australian Secure Capital Fund - Market Update

28 Mar 2023 - Australian Secure Capital Fund

The Australian property market showed signs of stabilisation in February with only a 0.1% decline in dwelling values across the country. Sydney recorded a 0.3% growth, and all capital cities still have values above pre-pandemic levels....

28 Mar 2023 - Australian Secure Capital Fund - Market Update

By: Australian Secure Capital Fund

Australian Secure Capital Fund - Market Update February

Australian Secure Capital Fund

March 2023

In a sign of the property market beginning to stabilise, February saw the price of dwelling values fall by just 0.1% across the nation. This is the smallest month-to-month decline since mid-2022 and the first time the monthly decline was less than 1% in almost 12 months, according to CoreLogic's National Home Value Index.

Property in Sydney recorded growth of 0.3% for the month, whilst Perth (-0.10%), Adelaide (-0.20%) and Darwin (-0.30%) all recorded minor reductions. Brisbane (-0.40%), Melbourne (-0.40%) and Canberra (-0.50%) also recorded smaller monthly falls than in recent months, with only Hobart (-1.4%) recording a reduction of more than 1%, with all capital cities still recording values above pre-pandemic levels.

New listing volume remains low, with 24,658 listings over the 4 weeks ending February 26, 17% below that of 2022 and 11.9% below the 5-year average. The last weekend of February recorded the highest number of auctions for the year (2,393), which was up 29.6% on the previous week (1,846); however this was still 29.3% lower than the same weekend last year (3,386). This trend is likely to continue until such a time that interest rates stabilise and confidence returns.

Whilst volumes are down, clearance rates are relatively strong, with Adelaide leading the way with an 88.6% clearance rate (83.8% last year), contributing to a national average of 69.7% (70.9% last year). The clearance rates for Sydney and Melbourne were also strong, recording 71.8% (72.6% last year) and 68.2% (67.6% last year), respectively. Brisbane's clearance rate was slightly weaker at 64.8% (70.6% last year) as was Canberra with 59.8% (74.4% last year).

We believe prices should start to stabilise from here due to a fundamental under-supply of housing stock. The easing of the rate in which prices are declining is likely due to this lack of supply, and with many economists forecasting that we are nearing the end of the rate rise cycle, buyer demand is likely to increase through the second half of the year and into 2024 as confidence returns.

Funds operated by this manager:

ASCF High Yield Fund, ASCF Premium Capital Fund, ASCF Select Income Fund

Investment Perspectives: Is the Aussie residential market bottoming?

27 Mar 2023 - Quay Global Investors

A stall in national house price declines while interest rates keep climbing has sparked yet another national debate on the future direction of the Australian residential market. Specifically, has the market bottomed?

Covid disruption and its effect on women in the workplace

24 Mar 2023 - abrdn

March 8 is International Women's Day - a day for celebrating the social, economic, cultural, and political achievements of women around the world. It's also a day when calls for accelerating gender parity are most vocal. This...

24 Mar 2023 - Covid disruption and its effect on women in the workplace

By: abrdn

Covid disruption and its effect on women in the workplace

abrdn

March 2023

March 8 is International Women's Day - a day for celebrating the social, economic, cultural, and political achievements of women around the world. It's also a day when calls for accelerating gender parity are most vocal.

This year's focus is on 'equity' - the idea that people are all different, and that to be 'fair', people will need different types of assistance to reach their potential.

Our A Woman's Place research series showed that higher female participation in the workforce isn't just ethical, it's also a solution to lacklustre economic growth in the developed world.

We created the Gender Equality Index (GEI), as part of this series, to assess the levels of gender equality in 29 Organisation for Economic Co-operation and Development (OECD) countries.

Leaders, laggards

Perhaps not surprisingly, Nordic countries - Sweden, Denmark, Norway and Finland - continue to top the ranking in the latest GEI update, a reflection of those countries' long history of progressive social policies that give women there more choices (See Chart 1).

Chart 1: Scandinavian countries hold onto top spots

Chart

Source: abrdn, World Bank, OECD, VDEM, as of 2023

Bringing up the rear are Italy, the US, South Korea and Japan - again there was little change in this part of the table. Women in the US still have limited maternity leave relative to their peers, while Japan and South Korea lag in terms of female empowerment.

Covid slowed progress

As these countries emerge from almost three years of pandemic-induced social and economic disruption, the index uncovers a slowdown in female-employment rates in several economies.

Here are two reasons why:

Covid job losses affected women more than men. During previous economic downturns men usually bore the brunt of higher unemployment. These were often driven by industrial, rather than services-led, slowdowns.
But during Covid, the female-unemployment rate remained higher than that for men. That's because those sectors most affected by pandemic lockdowns were ones in which women are overrepresented.
Women were forced to reduce hours and leave the workforce to care for families. Women typically have disproportionately more care responsibilities than men.

In the early stages of lockdowns, average paid working hours for women fell 16.4% (compared to a 14.9% fall for men) amid the closure of formal childcare facilities and as women cared for adult relatives (See Chart 2).

Chart 2: Women's working hours fell more than men's during the initial Covid wave

Source: OECD, as of 2020

As a result, the average female labour force participation rate remains below the pre-pandemic rate.

The average female labour force participation rate remains below the pre-pandemic rate

On the bright side

However, it's not all bad news. The index also shows that:

Men are spending more time on childcare. Many men now spend part of their week working from home and share more childcare duties.

How long this will last is debatable, but studies have shown that after periods of parental leave, men's participation in childcare duties tends to remain higher.
More flexible work may be positive for female-labour participation. Flexible working arrangements may help women remain in the workforce despite uneven care burdens.

However, there's a cost to more flexibility in the form of obstacles to career advancement - reduced mentoring, training, and access to promotion. This, if unaddressed, may even lead to further widening of the gender pay gap.

Final thoughts

The pandemic has shone a light on the structural inequalities that exist within societies and economies. However, much more needs to be done to systematically address these issues.

For example, caregivers' leave - a temporary Covid-era policy - could be made permanent to address the unequal distribution of responsibilities placed on women.

Improving access to caregiving and increasing flexibility in the labour market are key to retaining women in the workforce.

Understanding the extent to which the lasting effects of the pandemic have improved, or worsened, labour market inequalities will take time. But the GEI is one tool we can use to do so.

Author: Abigail Watt, Research Economist, Research Institute

Funds operated by this manager:

The Rate Debate - Ep35 Is the RBA setting monetary policy in the rear-view...

23 Mar 2023 - Yarra Capital Management

At its first meeting for 2023, the RBA hiked rates for the ninth consecutive month to urgently tame inflation, telling the market to expect more to come. Given Australia's inflation levels have lagged the US, is Australia six months...

Pull the Weeds

22 Mar 2023 - Marcus Today

The life of a trader is not what most of us might imagine it to be - ie. glamourous, exciting and paved with gold. More likely it is solitary, private, a bit boring and when done right, provides a living.

22 Mar 2023 - Pull the Weeds

By: Marcus Today

Pull the Weeds

Marcus Today

February 2023

The life of a trader is not what most of us might imagine it to be - ie. glamourous, exciting and paved with gold. More likely it is solitary, private, a bit boring and when done right, provides a living.

We could all be traders.

We could all be Arnold Schwarzenegger too. Go to the gym every day, lift heavy weights, drink protein shakes, avoid chocolate, and talk in a vague middle-European accent. But the reality is, who can be bothered?

We could all be traders. We could all be Arnold Schwarzenegger too.

And who can be bothered to be a trader because to do it properly is pretty much a full-time job, and most of us already have one of those, and those of us who don't probably don't want one.

But that doesn't mean we can't adopt some of the core principles of the job, principles that apply not just to traders but to investors as well, principles like "preserve your capital" and "cut your losses". Clichés all, but as any trader will tell you, no trading system will succeed without them and no long-term investor will either.

The big mistake for long-term investors is that they see things as being part of a portfolio in which the winners make up for the losers.

With that mindset long-term portfolio investors "excuse" the losers and do nothing about them. But if you really want performance the losers are just as important as the winners and you need to protect against them. To do that you have to pull the weeds and plant flowers in their place. And if flowers turn into weeds, pull them and plant some more. Do this relentlessly and you will end up with a garden full of blooming flowers.

How do you pull weeds? Simple. Use stop losses. How? Let's cut to the substance.

What are they: An order that automatically closes your trade at a predetermined price, thus limiting your loss. A stop loss is a mechanism that short circuits debate and emotion and provides certainty.

Requirements: Forget the concept of "portfolio". Think of every stock you hold as a separate trade. Preset a stop loss for each individual holding, preferably when you are unemotional and in possession of a clear mind. The time of purchase would be good, but any time will do.

The mechanism: It is impossible to set a rule for everyone. For those of us without trading systems, you can use a number of different methods to set stop loss levels.

The most obvious is a flat percentage. If it falls by five per cent, sell it. But that's very basic and most of us struggle doing that in practice. The market is so volatile these days.
Most (hardcore) traders use "The 2% rule". The 2% rule means you are prepared to risk a maximum of 2% of your trading capital on any one trade. In other words, on $100,000 of capital (a portfolio of $100,000) they would cut a trade that makes a $2,000 loss. Notably, this is not the same as a 2% drop in share price. If they have put $10,000 of the $100,000 portfolio in the trade it could be a 20% loss on that one trade ($2000 of the $10,000).
Another way to set stop loss levels is by reference to a chart rather than a percentage. For instance, if you are trading price breakouts (buying stocks that break a resistance level) the stop loss can be set at the price at which it breaks out and so the resistance level that was broken serves as the stop loss level if it reverses again.
Then there are rolling stop losses. As prices rise you raise the stop loss to guarantee a profit if the price then falls from its new high.
Once in profit, some people use "partial stops", they continue to identify levels or technical sell signals and either sell all or part of the position depending on what level or signal is hit.
Others set stop-loss levels with reference to the volatility of the stock. Setting stop losses at a level that allows the trade to develop without being stopped out by a normal fluctuation. The way to avoid this is to learn about volatility and the average true range (ATR). Simply put this means accounting for how volatile a stock is when setting a stop loss. Volatile stocks need more room to move. If you don't understand volatility you are trading every stock as if it has the same risk, and clearly, there is a big difference between trading Telstra (ASX: TLS) and trading Zip Co (ASX: Z1P). It's easier than it sounds.

Ultimately there are a lot of ways of setting stop loss levels. As noted, a flat percentage is very basic. But the core to it is to make the decision to use them rather than rely on guts, to set your stop loss levels early, to set them for each individual stock and stop thinking in terms of "the greater portfolio".

I suggest you read some trading books - the foundation stuff that takes you ahead of the average punter in terms of trading discipline. Most good trading books are very hard work (dull) and full of theory. And they often, interestingly, have nothing to do with picking stocks but are about risk management.

But the early realisation will be that "It's not what you buy, it's all about what you do after you buy".

Managing the investment, not making it. Most high (low) brow investors working off Buffett quotes have been brainwashed to think it's all about choosing what to buy. For a trader its all about what you do after you buy. That's the bit that needs a plan and discipline and vigilance and where almost everyone goes wrong and doesn't bother.

If you are one of those "Set & Forget", Buffett quoting, ineffective "Invest as if they are going to shut the market for ten years" investors, shut your eyes, exercise your first stop loss, and see what happens. You will instantly move from confused, indecisive and unfit to invest, to something…better.

Forever.

It's not hard. Try it.

Author: Marcus Padley, Founder of Marcus Today

Funds operated by this manager:

Marcus Today Equity Income SMA, Marcus Today Growth SMA

Trip Insights: Americas

21 Mar 2023 - 4D Infrastructure

This is the 12th in our series of Trip Insights where we share our travel experiences. It follows a trip taken by Sarah Shaw, Global Portfolio Manager, to Mexico and North America in January 2023.

New Funds on Fundmonitors.com

20 Mar 2023 - FundMonitors.com

Here are some of the latest additions to our database. Follow the links to view each fund's profile, where you'll have access to their offer documents, monthly reports, historical returns, performance analytics, rankings, research,...

20 Mar 2023 - New Funds on Fundmonitors.com

By: FundMonitors.com

New Funds on FundMonitors.com

Below are some of the funds we've recently added to our database. Follow the links to view each fund's profile, where you'll have access to their offer documents, monthly reports, historical returns, performance analytics, rankings, research, platform availability, and news & insights.

Ellerston Asia Growth Fund

Inception date:	January 2017	Minimum initial investment:	AU$10,000
Strategy:	Equity Market Neutral	Distributions:	6 Monthly
Geographic mandate:	Asia	Management fee:	1.00%
Investor type:	Retail	Performance fee:	15.00%

View Profile

Ellerston India Fund

Inception date:	May 2017	Minimum initial investment:	AU$10,000
Strategy:	Equity Market Neutral	Distributions:	6 Monthly
Geographic mandate:	India	Management fee:	1.10%
Investor type:	Retail	Performance fee:	15.00%

View Profile

Ellerston Global Equity Managers Fund - Class C

Inception date:	November 2009	Minimum initial investment:	AU$10,000
Strategy:	Equity Long/Short	Distributions:	Annually
Geographic mandate:	Australia/Global	Management fee:	1.75%
Investor type:	Retail	Performance fee:	16.50%

View Profile

Ellerston Australian Emerging Leaders Fund

Inception date:	August 2021	Minimum initial investment:	AU$10,000
Strategy:	Equity Market Neutral	Distributions:	6 Monthly
Geographic mandate:	Australia	Management fee:	1.10%
Investor type:	Retail	Performance fee:	20.00%

View Profile

Ellerston 2050 Fund

Inception date:	May 2022	Minimum initial investment:	AU$100,000
Strategy:	Equity Market Neutral	Distributions:	6 Monthly
Geographic mandate:	Australia/NZ	Management fee:	1.50%
Investor type:	Wholesale	Performance fee:	20.00%

View Profile

Want to see more funds?

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Manager Insights | PURE Resources Fund

20 Mar 2023 - FundMonitors.com

Chris Gosselin, CEO of FundMonitors.com, speaks with Daniel Porter, Portfolio Manager at PURE Asset Management. The PURE Resources Fund is a specialist hybrid equity fund with an absolute return focus, investing in Australian...

Experiences Rule!

20 Mar 2023 - Insync Fund Managers

The Experience Megatrend, of which travel is a component, is one of 16 in our portfolio. Borders have reopened and travel is at full throttle. Growth rates in this industry are through the roof as the industry powers ahead from the...

20 Mar 2023 - Experiences Rule!

By: Insync Fund Managers

Experiences Rule!

Insync Fund Managers

February 2023

The Experience Megatrend, of which travel is a component, is one of 16 in our portfolio. Borders have reopened and travel is at full throttle. Growth rates in this industry are through the roof as the industry powers ahead from the COVID-19 pandemic.

An individual's desire to travel is hardwired into human DNA. The rapid speed with which the recovery is occurring can be seen from the chart on the right; this is before China's reopening has its likely large impact.

Whilst airlines and cruise ships may be the more obvious ways to invest in this megatrend, they come with high levels of financial and operational risk. Companies like Qantas have had to raise capital every time there is a crisis. Their long-term performance has never reached our minimum quality hurdles.

Our work has identified online travel agents are best positioned to deliver some of the highest and most consistent levels of profitability in this megatrend.

No capital raisings were required, despite the shutdown in travel because of their exceptionally strong balance sheets. As we move into an environment where the use of digital apps to efficiently build travel itineraries accelerates (including researching, booking, and paying), investing in online travel agents should provide one of the highest quality ways to participate in the resurgence and secular growth in travel.

Funds operated by this manager:

Insync Global Capital Aware Fund, Insync Global Quality Equity Fund

Disclaimer
Equity Trustees Limited ("EQT") (ABN 46 004 031 298), AFSL 240975, is the Responsible Entity for the Insync Global Quality Fund and the Insync Global Capital Aware Fund. EQT is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT). This information has been prepared by Insync Funds Management Pty Ltd (ABN 29 125 092 677, AFSL 322891) ("Insync"), to provide you with general information only. In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither Insync, EQT nor any of its related parties, their employees or directors, provide and warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the Product Disclosure Statement before making a decision about whether to invest in this product.

Fund Monitors Pty Ltd

News

29 Mar 2023 - How can investors help close the gender wealth gap?

INVESTING THROUGH A GENDER LENS

GOOD FOR EQUITY, GOOD FOR RETURNS

28 Mar 2023 - Australian Secure Capital Fund - Market Update

27 Mar 2023 - Investment Perspectives: Is the Aussie residential market bottoming?

24 Mar 2023 - Covid disruption and its effect on women in the workplace

Leaders, laggards

Covid slowed progress

On the bright side

Final thoughts

23 Mar 2023 - The Rate Debate - Ep35 Is the RBA setting monetary policy in the rear-view mirror?

22 Mar 2023 - Pull the Weeds

21 Mar 2023 - Trip Insights: Americas

20 Mar 2023 - New Funds on Fundmonitors.com

20 Mar 2023 - Manager Insights | PURE Resources Fund

20 Mar 2023 - Experiences Rule!

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