Financial Advisor contributor Paul Ellis recently interviewed Patricia Farrar-Rivas, the founding principal and CEO of Veris Wealth Partners, to discuss how advisors and investors are using funds that are focused on gender-lens issues in their long-term investment strategies.
Ellis: Patricia, Veris Wealth Partners participates in an ongoing study of the growth in gender-lens focused portfolios available to retail and institutional investors. Why has your firm made this a priority?
Farrar-Rivas: In my 24 years of focusing on sustainable and impact investing, gender lens investing is among the three most popular thematic approaches to constructing funds or portfolios. The other two are fossil fuel divest/invest and building low carbon portfolios.
There are conferences dedicated to gender lens investing before the industry has a significant number of portfolio offerings available to investors and advisors for implementing these strategies. With 15 funds currently available to investors, the demand for gender lens investing is ahead of the delivery of product choices with acceptable time frames of performance.
Advisors should be asking asset managers about their ability to add new funds focused on gender lens issues, whether they are active or passive in portfolio construction. This will make gender lens investing more accessible to retail and institutional investors.
Ellis: “The US SIF Sustainable, Responsible and Impact Investing Trends 2016” report released last November defines gender lens investing as a “focus on investment products or companies that actively support women’s socioeconomic advancement”. Tracking gender lens investing for the first time, the report identified $397 billion in professionally managed assets across asset classes that focus on this issue.
The report identifies appeal for gender lens investing among foundations, family offices, pension funds and individual investors focused on companies that help women advance in the workplace, and organizations that assist women living in communities that are underserved by the traditional banking system.
Farrar-Rivas: The 2016 Trends report data supports our experience that distribution channels for more product offerings are developing quickly as the demand from investors increases.
Ellis: Given the relatively small number of choices and short track records, how are advisors and investors using gender-lens focused funds in their long-term investment strategies?
Farrar-Rivas: There are multiple opportunities available on platforms where advisors have flexible account choices. Passively managed SMA accounts can be built to mimic available gender lens indexes. This approach can be part of a core global portfolio that includes equity and fixed-income solutions for individuals or institutions. Foundations and other mission-related investors can add other ESG sleeves to this kind of portfolio construction that are sector or environmentally thematic, for example.