Morgan Stanley is urging its financial advisers to talk with clients about investing in companies that are supportive of women through employment or their products and services.
The investment firm this week began providing its almost 16,000 financial advisers across the U.S. with a primer on investing in businesses that have women in top leadership roles or provide products and services that benefit females, according to
Lily Trager, director of investing with impact for Morgan Stanley's wealth management unit.
The firm started the initiative after hearing from its brokers and clients that they were seeking ideas for investing in companies supportive of gender equality. Morgan Stanley is suggesting individual stock-picking as well as strategies employed by mutual funds and
separately managed accounts that help close the gap in pay and leadership.
“Financial advisers are looking for ways to bring up topics that are important to their clients,” said Ms. Trager. Some investors want to avoid companies with weak policies from a women's perspective, she said, while focusing on “utilizing gender diversity criteria to identify potential long-term outperformance.”
Morgan Stanley has more than 130 investment products on its “investing with impact platform,” including those aimed at generating returns from companies that have a role in shaping positive environmental and social outcomes. About 30 of the products, including mutual funds, exchange-traded funds and
separately managed accounts, may be used by investors seeking to support gender diversity, Ms. Trager said.
High-net-worth investors and institutional clients such as endowments and foundations don't have to sacrifice returns when backing companies that do more to achieve balance between men and women in the workforce and economy, according to the firm.
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Morgan Stanley research study found that companies with greater gender diversity produced slightly higher returns and lower volatility over a five-year period ended in March.
Investors who want to advance gender diversity may seek out companies with more women on boards and in top executive positions. Or they might lean toward businesses that provide supportive healthcare policies and affordable childcare, as well as those focused on helping women who start their own businesses.
Globally, technology has the lowest female representation on boards, while traditional defensive sectors such as telecommunications, consumer staple and utilities have the highest, according to Morgan Stanley.
Other investment firms are looking to support women. Former Wall Street executive
Sallie Krawcheck is trying to close the gender investment gap through Ellevest, a robo-adviser for women that she co-founded less than two years ago. The fintech start-up announced this month that it raised $9 million in its latest round funding from investors including professional tennis player Venus Williams and Ariel Investments president Mellody Hobson.
Ms. Krawcheck, the former head of
Bank of America Merrill Lynch and
Citigroup Inc.'s wealth management business, also opened the Pax Ellevate Global Women's Index Fund in 2014. The fund invests in publicly-traded companies that have greater numbers of women in management positions. It has
returned 6.22% this year.
