Women are more motivated by the real-world impact of their investments than men, according to Hargreaves Lansdown’s recent Sustainable Investor Survey. Prioritising issues such as human rights, labour standards and living wages were some of the areas noted. Tara Irwin, Senior ESG Analyst, shares more of the findings in this article.
The gender investment gap remains persistent. The latest FCA Financial Lives Survey shows UK men are more than one and a half times more likely to invest than women, with only 28% of women currently investing.
At the same time, the gender pension gap stands at 35%, reinforcing long-term financial inequality.
Perhaps some of this is due to the perception of who investing is for – as of the end of 2024, according to Morningstar, just 21% of global funds had at least one female portfolio manager, meaning nearly four out of five funds were managed exclusively by men.
For investment trusts, recent data from the AIC showed just 11% of closed-end funds were run by women.
Yet participation in markets is rising. At Hargreaves Lansdown, the proportion of female clients has steadily increased over the past five years and now stands at 39.5% of our total client base, a huge leap in building Britain’s wealth.
Our latest Sustainable Investor Survey suggests women are not disengaged from investing, they simply approach it differently. Nearly half (47%) of women say it is very, or extremely, important that their investments reflect their values, compared with 28% of men.
Women are more likely to prioritise issues such as human rights, labour standards and living wages, and show greater discomfort investing in sectors such as defence, tobacco and nuclear energy.
They are also more motivated by the real-world impact of their investments.
Closing the gender investment gap won’t happen by accident. It requires funds that reflect what matters to investors, alongside clear and accessible guidance.
For women who want their money to reflect their values as well as grow for the future, now is a great time to act.”
HL’s Responsible Investment hub offers practical guidance, insights and fund ideas to help investors make informed choices aligned with their principles.
Fund ideas from the HL Fund Research Team
Janus Henderson UK Responsible Income: The fund invests in UK companies and aims to provide income alongside long-term capital growth.
The manager, Andrew Jones, avoids companies that some investors find unethical, like those with significant involvement in animal testing (unless for medical testing), nuclear power, armaments and controversial weapons.
The fund also excludes companies generating power from fossil fuels; however, companies generating power from natural gas can be allowed if their strategy includes clear plans for transitioning to renewable energy.
The fund’s exclusions mean its investable universe is significantly reduced compared to unconstrained peers. This means the fund can perform differently to other UK funds and the broader UK stock market.
Janus Henderson aims to be a responsible steward of investors’ money. Company site visits, speaking to workers and questioning company management are just some of the ways the fund manager assesses each company’s sustainability credentials.
Legal & General Future World ESG Tilted & Optimised Developed Index: This fund is a good option for broad exposure to global stock markets, while being mindful of environmental, social and governance (ESG) issues.
It aims to track the performance of the Solactive L&G ESG Developed Markets Index and is made up of over 1,650 companies based across the world.
It avoids investing in companies involved in controversial weapons, and those with significant involvement in tobacco, adult entertainment, gambling, civilian firearms, military weapon system manufacture, thermal coal and oil sands. Persistent violators of the UN Global Compact Principles (a UN pact on human rights, labour, the environment and anti-corruption) are also excluded.
The index increases investments in companies that score well on a variety of ESG criteria, such as the number of women in the workforce, at the executive level, and on boards. It also reduces exposure to companies that score poorly on these measures.
The fund also aims to achieve at least a 7% reduction in carbon emissions per year until 2050.
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The writer’s views are their own and do not constitute financial advice.
This information should not be relied upon by retail clients or investment professionals. Reference to any particular investment does not constitute a recommendation to buy or sell the investment.
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