If you’re new to share market investing, or have always been there, take a minute to read about how investing in women could soon become the newest market darling.
It used to be all about investing in blue chips, then high-dividend paying stocks, and now it seems selecting companies by the number of women at the top could be the way to make money on the sharemarket.
The country’s biggest health insurer Medibank Private and property group Mirvac Limited are the only two listed companies in the ASX200 with 50 per cent or more women as diretors, and had you bought shares both in 16 months ago you’d be looking at a combined total shareholder return of 30 per cent, including dividends.
Compare that to a 1.3 per cent loss for the ASX 200 accumulation index as of close of trade on Friday.
In addition, two of the top three performing companies last year in the All Ordinaries index had female chief executives. Bellamy’s Australia, led by Laura McBain had a 725 per cent return and Blackmores, led by Christine Holgate, had a 519 per cent return in 2015.
As International Women’s Day helps puts the spotlight on women’s issues, evidence is also building that more investors are reviewing the gender composition of companies in their stock selection.
“I have given a mandate to my private investment advisers that the only companies I will invest in have a minimum of 25 per cent women on their board,” said prominent businesswoman and Stockland director Carol Schwartz.
“When you have a mixture of people around the table then you are going to get the best type of decision making,” Ms Schwartz told an International Women’s Day gathering of the Association of Financial Advisers in Melbourne.
Pauline Vamos chief execuive of the Association of Superannuation Funds of Australia said super funds are also “actively seeking gender diversity on their boards.”
The gender make-up of company boards has attracted increased attention over the past year as research, such as that done by the Reibey Institute in 2010 and 2011, found the performance of companies with more female directors was higher than those that had less women, based on return on equity and investment.
“The reason that diverse teams outperform homogenous teams is that each individual operates at a higher intellectual capacity when they are with people who are different from them,” said Amanda Dobbie of Women in Banking and Finance.
Since the Medibank float on November 25, 2014, shares in health insurer have increased by 30 per cent to $2.80, while shares in Mirvac have gained 6.8 per to $1.80 cent over the same period.
Mirvac shares have gained 42.7 per cent, broadly in line with the property sector significantly better than the ASX200 which is up 4.6 per cent for the same time frame.
“It is good to see that research is confirming that more diverse boards do deliver better investment outcomes to shareholders,” said Colonial First State Global Asset Management head of responsible investment Asia Pacific Pablo Berrutti.
“There is no doubt that composition of those at the top is an important consideration when you are looking at how you invest your hard-earned dollars,” said Claire Braund, executive director of Women on Boards, who also cautions against investing on gender alone.
The Australian Institute of Company Directors (AICD) chief executive John Brodgen said the institute would soon release an updated report on the number of companies that had agreed to be part of its voluntary 30 per cent club.
“We are putting pressure on the boards of all ASX 200 companies to agree to at least 30 per cent [female representation] by 2018.
“Crusty old white blokes have finally got the message,” Mr Brogden said.
The AICD has previously been criticised for not going far enough with its target after objecting to Senator Nick Xenophon’s Gender Balanced Representation Bill last year, which required at least 40 per cent women and 40 per cent men on government boards.
Currently there are only 14 listed companies in the top 200 that have 40 per cent women or more as directors.
Outside of the top 200, there are companies with predominately female boards such as superannuation services provider OneVue Holdings, which has seen its share price surge 111 per cent since its initial public offering in July 2014.
“There is no doubt that super funds are actively seeking gender diversity on their Boards”
To read the full article as it appeared on news.com.au click here.
In this article
- Expert Insights
- Women + Money
- Amanda Dobbie of Women in Banking and Finance
- Association of Superannuation Funds of Australia
- Australian Institute of Company Directors
- Australian shares
- Bellamy's Australia
- Bianca Hartge-Hazelman
- Carol Schwartz
- Christine Holgate
- Claire Braund
- Colonial First State Global Asset Management
- gender equality
- International Women’s Day
- invest in women
- John Brodgen
- Laura McBain
- Pablo Berrutti
- Pauline Vamos
- pay equality
- pledge for parity
- private health insurance
- Women on Boards