According to a study conducted by BofA Securities, investing in Asian companies with a higher proportion of female managers has produced benchmark-beating returns.
A basket of the MSCI Asia Pacific Index’s members with the highest percentage of women in management posted average five-year returns that were 4% points higher than the estimated benchmark, the report found.
The following stocks also surpassed a portfolio of firms with the fewest women in management by 26 percentage points over the similar period, according to strategists including Matty Zhao and Girish Nair, who wrote in a report.
Since 2010, the returns on the BofA analysis are the latest to suggest widespread leadership, which can ideally be attributed to corporate success. Furthermore, a McKinsey & Co. report noted that most of the companies with at least 30% of executives who are women are more likely to outperform those with lower percentages of women in leadership.
Along with all the reports, Credit Suisse Group AG, an investment company, noted in a report conducted in 2021 that “diversity premium”—as measured by gender assortment on boards and executive leadership—corresponds positively with higher corporate and stock performance.
Referring to returns above the estimated benchmarks, the BofA strategists wrote, “Along with bringing diverse experience, knowledge, skill-sets, and perspectives, data suggests greater gender diversity in management brings additional alpha.”
Because stock rates have been higher with more women managers, they have also lowered the weighted average cost of capital by 22%, and had returns on shares that were 2% higher on average than the bottom one-fifth since 2010.
Investors, including State Street Global Advisors and BlackRock Inc., have persuaded companies to add women to their boards and to senior management roles.
According to MSCI Inc., women trumped-up more than 24% of the board members of MSCI AC World Index companies in 2022. Also, a study released in the previous week, compared that to about 18% in 2018.
However, the levels of disclosure in the benchmark are low. Whereas, about a quarter of companies in Asia have reported that a gender breakdown of their management teams was initiated in 2022, and the numbers show that women make up 25% of the roles in the region, according to BofA’s study.
Besides, Pay gap issues persist, with women earning 83 cents on average for every dollar earned by men, and are particularly striking in China, South Korea, and India.
- Published By Team Genuine Reporter