Some members are excited for retirement, while others approach it with a “real sense of shame and fear”. Funds are going to have to figure out how to cater to both groups or risk failing them all.
If there’s one lesson for investors from the past five years, it’s that chopping and changing their strategy – even in the face of massive market turmoil – doesn’t always pay.
… and AXA shows the benefit in financial performance
by Matthew Lee
AXA Investment Managers has launched a global equity strategy capitalising on companies which promote gender diversity along side responsible investing. The move comes as part of the growing global trend towards ESG, of which gender diversity is a key part.
The strategy aims to generate long-term capital growth from companies that foster gender diversity, while still providing the risk-return characteristics of traditionally managed equity funds.
Speaking at a media briefing last week, AXA IM’s global head of ‘Responsible Investment’, Matt Christensen, said there was a shift in the demand for responsibility and social consciousness, and that demand was finally being responded to in the form of new investment products and solutions.
“The definition we use for responsible investing is an investment that can deliver sustainable long term value for clients and creates a positive impact on society,” said Christensen.
“It’s important that we consider both sides; we think there is value for investors in this strategy but we can also increasingly show the positive impact we are having…. It’s the coupling of these two factors that is really widening responsible investing’s position to take off more and more.”
One of the key components of the strategy is the focus on the impact of gender diversity on investment returns. Research by the McKinsey Global Institute in 2015 has shown that US$12 trillion could be added to global GDP by 2025 by investing in the advancement of women’s equality.
Further research by UBS and Bloomberg in 2016 showed that companies with at least 20 per cent women on the Board and in senior management had higher top line growth, higher margins, better returns and a lower risk profile.
Mr Christensen said that AXA IM views gender diversity as a strategic consideration, not a compliance consideration.
“We saw a great opportunity to create a ‘gender diversity’ impact strategy that favours investments in companies that demonstrate a strong commitment to promoting women in senior management and leadership positions,” said Mr Christensen.
“The academic studies are coming out saying that the more you think about diversity as a strategic component to your business, the better your business should perform over time, because you’re allowing that idea of a richness in discussion to lower your own risk of mindshare that is of the same unconscious bias.
“It’s really important that this links to the business drivers, it’s not enough to say that if you have a board of 5 people that 2 of them are women. That’s just the starting point, a stepping stone to what is required to create an ideal sort of company culture.”
AXA IM intends to open an Australian-domiciled pooled fund using the strategy later this year.
