It is well known that women and, even worse, black women suffer from a pay gap compared to white men. It was also reported that women tend to be more interested in ESG (environmental, social and governance) investing, but not specifically in gender equality.
If you’ve read any of my articles on values-based financial planning and investing, you’ll read that I believe everyone should develop a financial plan that aligns with their values. That said, I know that some people, even women, are also very worried about actually being able to retire by investing in gender equality. This is the first, in my series of posts for March 2022, that will examine this very question.
There are several resources you can go to to learn more about funds that have positive gender equality scores. In order to help my clients in this area, I have chosen to invest in the Morningstar Sustainability Ratings and in Your bet. We also use this publicly available resource for As You Sow’s, Gender Equality Fund.
If you navigate to “Gender Equality Funds” and select “Top Scoring Funds”, you will find 10 lists with an A rating.
Several of the mutual funds have multiple classes of shares of the same fund. One fund is the Calvert International Equity Fund.
Mutual funds can have multiple share lessons. The share class is simply how the mutual fund rates the costs of operating the fund for different distribution channels. For example, a roll of toilet paper at 7-11 usually costs more than the same item in bulk at Costco.
If you click on the Get More Funds button at the bottom of the list, you’ll find that there are more funds with A ratings. The gender equality page doesn’t tell you exactly what to invest in. Rather, she simply tells you what grade she rated.
Each of these funds can belong to a different category. If you select financial performance, you will see more information about the mutual fund.
While you might only want to choose one of the mutual funds, if you were going to build a diversified portfolio, you would probably want to look at funds in different stock classes, large cap US mutual funds, US small cap companies, large international cap companies, emerging markets, etc.
Since you have your own investment recipe, you can look at each of these funds and then decide which one to put in the recipe in the proportion suggested by the recipe.
Most people are concerned with more than gender equality.
If you are going to use the gender equality ratings, I recommend that you also select the other issues alongside the performance numbers. It seems that an A student in one subject does not make you an A student in all subjects.
It’s a little shocking to see that using the As You Sow methodology, the Calvert mutual fund gets a D rating for weapons. Weapons might not be an issue for you, but if so, you’ll probably want to know more about a fund you choose.
I recommend you do your own investigation as you may find that they are great for weapon exposure, it may not be your rank. This is one of the reasons we use Morningstar’s Sustainability and YourStake, which may also give different ratings.
If these other questions are important to you, you can contact You Sow’s sister sitesfor example, free from jail funds. As I explained in my article, Are you unknowingly investing in private prisons? you may want to investigate their assessment further.
For example, I once spoke with a company who said they had biblical values. I also discovered that they had a private prison! They felt that because the operation was based on real estate and not operations, it was “OK” to do so. My client thought otherwise.
What about passive or index investing in the S&P 500? I will cover that in my next article!
So can you really retire through passive investment in gender equality?
The short answer is yes. This answer however involves calculating how much you will/can spend and then being able to save long enough. Can you mix in a focus on gender equality? Yes! Depending on your investment philosophy, you can choose a single solution or develop a diversified portfolio. I don’t recommend jumping to the first one on the list and then jumping to the first sign of a declining return percentage.
I encourage you to either take the time to learn more about risk-adjusted return investing or find a qualified professional who does. Although they don’t have to be a Certified Financial Planner or a Certified Financial Analyst, I think that’s a good start. If they start telling you why investing in your stocks isn’t a good idea, you can either show them that resource or find another advisor. Most investment professionals have relatively little training in gender equality investing.
Others work at companies that don’t allow their financial advisors access to all of the mutual funds and exchange-traded funds listed by As You Sow. Still others are not representatives of investment advisors, which limits their choices based on the mutual funds with share classes I discussed earlier.
I think investing in companies that promote gender equality is a necessary step to achieve gender equality. To your retirement powered by gender equality!