DWS is no stranger to ESG-related potential calamity. Last year, the firm was at the centre of an SEC probe into claims of greenwashing across its $1 trillion dollar range of products. Rather than be put off by venturing into ESG investments, the German firm has essentially ‘doubled-down’ on its sustainability programme with the launch of a new sustainably investing equity fund, dubbed DWS Invest ESG Women for Women.
The fund invests globally in companies that focus on environmental protection, good corporate governance and fair treatment of their employees. According to the firm, the fund pays particular attention to social aspects – to the "S" in "ESG", as DWS would have it.
DWS Invest ESG Women for Women is managed exclusively by women and specifically targets the needs of women when selecting their investments.
To select companies that perform well in terms of social values and fair working conditions, the 12-strong team of female portfolio managers led by Katharina Seiler, Valerie Schueler and Lilian Haag uses DWS's Social Commitment Score.
This score evaluates companies with regard to five factors: In addition to working conditions along the entire value chain, the topics of equal rights and opportunities, gender distribution at management level, work-life balance and flexibility of the working environment are included in the analysis.
"The shortlist for the fund includes companies that are leaders in the "Social Commitment Score" as well as companies where the fund management perceives particularly strong progress," said portfolio manager Ms Seiler.
The companies also undergo a classic fundamental analysis with a focus on the business model, management and the issues of growth and valuation. The portfolio managers of DWS Invest ESG Women for Women also focus on long-term investment trends such as digitalization, education, renewable energies, infrastructure, health, research and connectivity.
With its focus on social factors, the new DWS fund addresses a topic it believes is increasingly coming to the fore when it comes to investing - not least as a result of the Covid 19 pandemic. "Social aspects are an increasingly important success factor for companies. They can have a positive effect on the productivity and profits of companies, which should also be reflected in a positive performance on the stock market in the long term," said another portfolio manager Valerie Schueler, referring to history: over a period of five years, U.S. companies from the S&P 500 Index that are well positioned in terms of the "S factor" have performed better than the broad market.
“We want to motivate women to take charge of their wealth accumulation – also in view of the looming pension gap in old age," said Lilian Haag.
According to DWS, in contrast to men, women still have a lot of catching up to do when it comes to the capital market. Although around 80 percent of women already save regularly, only one in eight invests their money in the equity market.
How this product will be greeted by the market could be a watershed moment for DWS; it will either wash away alleged past sins or perhaps be seen as a tad heavy handed. Female participation in asset management has come a long way. For instance, Baroness Morrissey’s career which included a spell as chief executive of Newton Investment Management as well as being on the board of Legal & General Investment Management and St James's Place before becoming the chair at AJ Bell. Baroness Morrisey also formed the 30 percent club to enhance female representation on the boards of listed companies.
