This week’s International Women’s Day has highlighted key challenges in encouraging women to invest. eToro, the social investment network, has launched its new FemaleLeadership smart wallet, giving investors long-term exposure to companies that already demonstrate strong credentials and awareness of gender equality.
Research has shown that increasing the proportion of women in leadership positions has a positive impact on a company’s profitability and also tends to improve factors such as mentorship, collaboration, employee well-being , as well as diversity and inclusion initiatives.
Dr. Hedva Ber, Deputy CEO and Chief Operating Officer (COO) of eToro, says: “Female leadership and board diversity have proven benefits, not only for corporate culture, but also for business growth and development. The impact of these long-term factors is not just a stronger, more resilient company with better processes and fresher thinking, but in turn better results for investors.
Despite this, women hold only about 30% of leadership positions in the S&P 500, and the proportion is considerably lower when it comes to CEOs. In 2021, only 6% of S&P 500 CEOs were women. Nonetheless, the number of women in leadership positions and on boards is growing, and eToro’s new FemaleLeadership Portfolio has been designed to capitalize on the benefits this brings to their respective businesses and sectors.
The portfolio is made up of 35 US-listed companies from eToro’s existing stock universe, ranked on a range of metrics including gender diversity, consensus analyst ratings, stock liquidity and market capitalization. . To be eligible, at least 40% of the company’s management and board of directors must be women.
Dr. Ber adds: “To identify the best performing stocks of tomorrow, investors need to assess the processes and cultures a company is putting in place today and determine who is truly equipped for tomorrow. Diversity of ideas, skills and experience are the hallmarks of a company that is ready to evolve, embrace new ideas and respond creatively to future challenges. All of these characteristics have proven their importance for long-term success.
“Gender equality is only one aspect of diversity, but it is a crucial area where much progress needs to be made. This progress won’t necessarily be constant or obvious, and for people who don’t have the time to examine the ongoing developments within each industry, the market can feel overwhelming. With a ready-to-use and diverse portfolio of companies, we’ll do the heavy lifting and enable our clients to engage in this progress in an easy and responsible way.
The initial allocation of eToro’s new FemaleLeadership portfolio is more focused on the consumer and communications sectors, with particular emphasis on retail and internet businesses, in line with the ranking model mentioned above. The composition includes familiar brands whose leadership teams have made significant strides towards gender equality, including Disney, GAP, Uber, Paramount Global and Hewlett-Packard. The full attribution can be found here.
The launch of this wallet is part of eToro’s broader initiative to support women in business, finance and investing. eToro recently launched InvestWithHer, an online community designed to encourage more women to consider investing.