Legal & General Investment Management has launched a passive investment product that will allocate more capital to stocks it believes has achieved a greater level of gender diversity.
The Legal & General Future World Gender in Leadership fund will be available to private investors and advisers.
The fund is the initiative of Helena Morrissey, head of personal investing at L&G, and former chief executive of Newton Asset Management.
Legal & General will score and rank companies according to four gender diversity measures, women on the board of directors, women executives, women in management and women in the workforce.
The fund tracks a Legal & General designed index of 350 UK listed companies, with the investments tilted towards companies with a higher diversity score.
Ms Morrissey said: "Gender inequality is one of the key issues of our time. I am excited about the launch of the fund, which empowers us all to help companies to progress."
Her comments come in light of research from consultancy firm McKinsey & Co, which stated companies that have a greater proportion of women on their board of directors tend to deliver better returns for shareholders than those that do not.
Jason Hollands, managing director for business development and communications at Tilney, said: "While the vast majority of people would agree that it is healthy for businesses to have diverse work forces and that shareholders have an important role to play in encouraging board room diversity through their engagement activity, I am a little sceptical that having this as the basis of an investment strategy is going to find demand with investors."