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Gender diverse companies deliver better returns, says Axa’s Tolmunen

 

An increasing number of investors are demanding products aligned with their values, Axa Investment Managers’ Anne Tolmunen has said.

"I think what we’re not doing enough at the moment is talking about the investment case for gender diversity," she pointed out.

"Companies that are doing better on gender diversity tend to have better returns and a better performance – the two are interconnected."

Ms Tolmunen is manager of the Axa WF Mix in Perspectives fund, which was launched in February 2017, and is invested in companies with a better record when it comes to gender diversity in the workplace.

"We look at traditional metrics, such as the number of women on the board, the proportion of female senior executives," she explained. 

"I also like to look at the ratio of female employees to female managers across the organisation because… it’s a good indicator whether women are progressing within. But I spend most of my time looking at the culture and having a qualitative assessment of what the company is doing on gender diversity."

She argued there was research which showed because those companies had built an inclusive and diverse culture, they were better positioned to attract talent from the broadest talent pool. 

But Ms Tolmunen also questioned why there were not more products based on this insight.

"I think it’s because the investment community is very much accustomed to solely focus on hard data or financial data, and this is softer aspects. 

"But at Axa, we’ve long had an expertise into looking into those softer aspects, looking into human capital, because we understood early on, this is really a key competitive advantage for companies who are able to leverage that," she added.

The fund manager emphasised gender diversity was not the only investment criteria she looked at before selecting a stock for her portfolio, but that it was "an added ingredient".

Earlier this month, Legal & General Investment Management announced the launch of its Future World Gender in Leadership fund, which will tilt investments towards companies with a higher diversity score.

But Ms Tolmunen said the World Economic Forum has predicted it would take more than 200 years to close the gender pay gap globally and added: "I don’t think I’m going to be out of a job anytime soon then."

According to data from FE Analytics, the Axa World Funds Mix in Perspectives fund generated an 8.8 per cent return in the past 12 months to 24 May 2018, just behind the MSCI AC World index return of 10.3 per cent, but ahead of the FO Equity International sector return of 8.2 per cent.

eleanor.duncan@ft.com