Companies that support LGBTQ-inclusive policies outperform: Credit Suisse

Companies that support LGBTQ-inclusive policies outperform: Credit Suisse
These companies more easily attract and retain talent, according to analysts
DEC 01, 2020
By  Bloomberg

Shares in companies supporting diversity including gender identity and sexual orientation have historically performed better than the broader market, according to Credit Suisse Group AG analysts.

Credit Suisse’s market-cap weighted basket of about 350 LGBTQ-inclusive companies, which includes firms such as Apple Inc., Tesla Inc. and JPMorgan Chase & Co., has outperformed MSCI Inc.’s flagship ACWI global equity index excluding those 350 constituents by 378 basis points a year since 2010, analysts including Eugene Klerk wrote in a report.

These companies more easily attract and retain talent, with 72% of LGBTQ allies saying they’re more likely to accept a job where the employer supports LGBTQ equality, Credit Suisse said. Revenue growth and cash flow returns at the companies in the broker’s LGBT-350 basket also tended to be stronger than at the remaining firms in the MSCI ACWI Index, according to the analysts.

“The need for companies to take a pro-active LGBT+ approach is obvious in our view,” the analysts wrote. “With LGBT+ consumers making up between 5%-10% of the population we estimate that consumer spending by LGBT+ could represent as much as $5.6 trillion.”

Credit Suisse said it selected basket members based on either the presence of openly LGBTQ managers in senior positions or recognition as a top LGBTQ-inclusive employer in surveys such as the Human Rights Campaign’s Corporate Equality Index.

Almost 90% of companies in the LGBT-350 are based in North America, with financials and information technology among the top sectors represented. Another index tracking inclusivity, the U.S.-focused LGBTQ100 ESG Index, has also outperformed this year, with an 18% gain compared with 12% for the benchmark S&P 500 Index.

Even so, Credit Suisse said its analysis doesn’t aim to prove that a company’s focus on LGBTQ equality is the reason for potential outperformance, but merely highlights that these two factors coexist for the average stock in the LGBT-350.

Latest News

Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints
Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints

Stifel – so far - is on the hook for more than $166 million in damages, legal fees and settlements in investor complaints involving Roberts, a 35-year industry veteran.

iCapital secures $820M in latest funding, hits $7.5B
iCapital secures $820M in latest funding, hits $7.5B

The giant alt investments platform's latest financing led by T. Rowe Price and SurgoCap Partners, along with State Street, UBS, and BNY, will fuel additional growth on multiple fronts.

Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity
Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity

Some investors recently have seen million dollar plus decisions by FINRA arbitration panels involving complex products decisions go their way.

What does it take to feel 'financially comfortable' or 'wealthy' in 2025?
What does it take to feel 'financially comfortable' or 'wealthy' in 2025?

New report shines a light on how Americans view wealth today.

Retirement delays, Social Security fears prompt advisors to rethink income strategies
Retirement delays, Social Security fears prompt advisors to rethink income strategies

Concerns about outliving savings and healthcare costs are reshaping how "Peak 65" Americans and advisors approach income planning.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.