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Investment for Women, by Women: Ellevest Enters Impact Investing

Ellevest, a robo-advisor focusing on investment for women, has announced an impact portfolio option aimed at promoting the advancement of women.

Sallie Krawcheck, Ellevest’s founder and former CEO of Merrill Lynch Wealth Management and US Trust, wrote that their Impact Portfolios would aim to earn a competitive return. For now, the portfolios focus on three areas: women in leadership, thriving communities, and sustainable and accountable companies.

In addition to investing money in companies that advance women, Ellevest’s impact portfolios offer small business loans to women and to companies that provide community services like child education and care for seniors. Access to such services can help women stay in the workforce while upholding caregiving obligations.

Answering Demand

Although Ellevest is the first robo-advisor to enter the gender-lens investing space, the move is part of a larger trend. More and more women are looking to make a difference with their investment capital.

Data from Calvert Impact Capital finds that 29% of women surveyed have more than a third of their portfolio invested for impact, compared to only 20% for men. They’re also more likely to say that women’s empowerment is important to them.

In a statement announcing the new Impact Portfolios, Krawcheck said that current events have pushed Ellevest clients to recognize the collective power of their investment for women. “There’s greater urgency among women investors to use their growing financial clout in support of other women and to invest in the future they want—rejecting outdated views about sacrificing the potential for investment returns or forgoing their own goals in order to do so,” she said.

Gender-Lens Investing on the Rise

Startups like Ellevest aren’t the only ones developing new gender-lens investing services. Big banks like State Street and UBS have recently launched funds in the space.

In 2016, gender-lens strategies affected the management of more than $130 billion in money manager assets and nearly $400 billion in institutional investor assets, according to research by the Forum for Sustainable and Responsible Investment.

Other wealth managers have been ahead of the curve, offering gender-lens portfolios for some time. Glenmede’s approach has been to align investments with gender-diverse values by factoring leadership diversity into its investment analysis. “We’re seeing a lot of demand from successful women,” Laura LaRosa, Glenmede’s executive director of client development, said in a recent interview with Bloomberg. “They’ve seen firsthand how leadership can play a role in making companies successful.”

Gender-lens investment pioneer Suzanne Biegel stated that “I think that more funds are going to wind up on the platforms of investment management firms that are hearing from clients that they want these types of product available.”

At an October 2017 Glenmede event focused on gender-lens investing, the panelists highlighted the ability of investors to use a gender lens in selecting their portfolio while seeking competitive returns. Glenmede believes the focus on gender-lens investing may increase firm value and may reduce risk.

On September 26, Glenmede and BRAVA Investments brought together impact investing thought leaders to explore how investing in women can affect climate change. Watch a recording of the event.

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