Women have come into focus within the wealth management industry once again this week. Fund manager DWS launched a fund specifically tailored to female investors. The catchily-named DWS Invest ESG Women for Women will be run by women and will invest globally in companies that focus on environmental protection, good corporate governance and fair treatment of their employees.
But, is this the best way to improve gender equality in terms of investing?
There are two schools of thought on this.
Firstly, anything that encourages women to take a more active interest in investing or finance in general is a positive.
Currently, women are far less likely to invest than men. According to DWS’s own research, while 80 percent of women save regularly, only one in eight invests their money in the equity market.
As wealth transfers take place and more women create their own wealth, creating an environment where women are comfortable discussing investing is crucial. It also represents a significant commercial opportunity for firms.
It is also positive to see a female-led fund management team. Women are underrepresented across the wealth and investment management industry.
You cannot be what you cannot see. The next generation of potential female leaders need role models to look up to. This fund – and the media attention it has attracted – has shone a light on its 12-strong female team of portfolio managers led by Katharina Seiler, Valerie Schueler and Lilian Haag. They have the potential to become positive role models for young women considering entering the industry.
On the other side of the coin, some people find attempts like this to engage women patronising.
A fund does not need to have the word ‘women’ for women to invest in it. Women are capable of making rational investments decisions, just like men. Removing jargon and making all financial products more appealing to women could be a more inclusive and effective way of encouraging women to invest. It may also make the industry more appealing for women to work in.
There are also fears about the so-called pink tax. This can be an issue with products aimed at women. These products tend to come with a higher price tag. In one study, New York City’s Department of Consumer Affairs found many instances of gendered pricing when it examined 794 products sold in the city for consumers of all ages.
There is no evidence this is happening in the wealth management industry yet, but it is something to be aware of as more female-focused products begin to emerge.
Firms can also find themselves in hot water when promoting diversity & inclusion (D&I) or ESG. DWS is no exception. Last year, the firm found itself at the centre of an SEC probe into claims of greenwashing across its $1 trillion dollar range of products.
Of course, if a leopard is not allowed to change its spots, no progress will be made and the industry will be all the poorer for it. Progress should be acknowledged and encouraged if we are to move foreward.
Whichever side you fall on, the DWS fund has reignited the conversation about gender representation within the industry. That can only be a good thing.
