Womenomics and Gender Lens Investing

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Two wealth management experts explain the inspiration and economic value of an investment portfolio focused on companies that recognize women’s contributions..

By DeAnne Steele and Mariia Eroshin (U.S. Trust, Bank of America Private Wealth Management)

There’s a new ad from Hyatt floating around the internet targeting a very specific consumer group: the female business traveler. The ad, with bold text that reads “Introducing a new menu designed with you in mind,” is promoting a lighter, healthier menu geared towards female travelers. With women making up almost 50% of the business traveler demographic, up from just 16% in 1979, Hyatt is smart to tailor their message and their menu – and they are just one of the many companies recognizing the often untapped, and increasingly powerful, potential of the female consumer.

This is the new reality of the economics of women or “womenomics.” Women, with our collective purchasing power, are driving global economic trends. In the United States, women account for 83% of all consumer purchases, hold 89% of U.S. bank accounts, and by some estimates generate $5 trillion in consumer spending.And beyond our purchasing power, we also hold increasing sway in the workforce. Women represent 41% of the global workforce, and this number is only growing. When you start stacking up all the supporting statistics, it’s increasingly clear that womenomics can’t be ignored!

But it’s particularly inspiring when you take a look at what women are doing when they control investment in impactful causes. According to the 2011 Bank of America Study of High Net Worth Women’s Philanthropy, women influence their communities through philanthropy, with 90% being the sole decision-maker or an equal partner in decisions about charitable giving. Using investment dollars wisely, whether it’s through charitable giving, or by investing in a particular company, is one major way women can help influence the trajectory of women’s role in the economy.

From our perspective at U.S. Trust, Bank of America Private Wealth Management, we are seeing growing interest in aligning one’s personal or philanthropic mission with investment decisions, which is why we created a portfolio called WGES (Women and Girls Equality Strategy). We can support those companies that recognize the value of women’s contributions and invest in them. Gender Lens Investing applies a lens that actively seeks to include companies in a portfolio that are affecting and engaging women, rather than a screening approach that eliminates companies based on certain criteria. This could include female board participation, a certain percentage of female senior leaders, or strong maternity leave coverage.

Some say that with more legislation, companies and female leaders will be more recognized and supported. Yet, while women represent just over 50% of the U.S. population, we make up less than 20% of Congress and less than 25% of State elective offices. Investing with a gender lens can be an increasingly impactful step towards supporting the contribution and growth created by women leaders, in turn leading to more females reaching the upper echelons of government and corporations. Most of all, it’s a tangible way to help steer womenomics into the future.

About the guest bloggers: DeAnne Steele, CFA, CAIA is managing director and west investment executive at U.S. Trust, Bank of America Private Wealth Management. In this role, she is responsible for leading the Western Division’s investment professionals in their delivery and execution of U.S. Trust investment capabilities, solutions, and thought leadership. DeAnne also serves on the firm’s investment strategy committee and is a key contributor to the firm’s tactical and strategic asset allocation process.

Mariia Eroshin, CFA, CFP® is a senior vice president and private client advisor with U.S. Trust, Bank of America Private Wealth Management. Mariia is a board member of the CFA Society of San Francisco, and an active member of the CFA Institute, American Institute of Certified Public Accountants, Financial Planning Association, California Society of CPAs, and Association of Women in Alternative Investing.

Photo credit: Siri Hardeland via Flickr.

This article is designed to provide general information about ideas and strategies.  It is for discussion purposes only since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Always consult with your independent attorney, tax advisor, investment manager, and insurance agent for final recommendations and before changing or implementing any financial, tax, or estate planning strategy.

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