Women in management positions - Saxo Bank's new thematic basket

ESG, or environmental, social responsibility and governance issues, are of wide interest to both businesses and investors. Very often, the focus is on the letter E this acronym because environmental issues pose a significant problem for policy makers due to climate change. However, the latest thematic basket of the action created by Saxo Bank focus is on the letter S (social issues)and more specifically the issue of women in leadership positions. The basket includes 30 companies with a market value of $ 1,1 trillion with a high proportion of women in management positions. Recent research shows that companies with a high degree of gender equality in leadership perform better both in terms of foundations and in the stock market.

Why this particular topic?

Saxo is launching a thematic basket focused on women in management positions. Why is such a basket needed? In the context of investment thematic areas, Saxo is currently focusing on ESG, and the participation of women in company management is a social aspect of the corporate sector. Recent research ("Women in Top Management and Firm Performance", Nina Smith, Valdemar Smith, Mette Verner and "Women in Business and Management: The business case for change", International Labor Organization) also showed that the impact of more diversified executives on company performance is generally positive. In turn, a study by S&P Global showed that listed companies with more female executives perform better.

The histogram below shows the percentage of female executives in 2 North American, European and Asian companies with a market value of more than $ 600 billion. The median is only 5%, so few companies guarantee gender equality in this regard. This ratio is very low and points to a profound change that will undoubtedly occur in the decades to come. For now, however, gender equality in management applies to selected companies, and they are the basis Saxo theme basket.

Thematic basket "Women in managerial positions"

Composed of shopping cart 30 companies, 10 each from North America, Europe and Asia and the Pacific (from developed countries). Companies with a market value of less than $ 5 billion were excluded from the list. The average proportion of female executives in these three geographic regions is 63,2% (North America), 52,9% (Europe), and 59,7% (Asia-Pacific), respectively.

The selected 30 companies have a market value of $ 1,1 trillion, with JPMorgan Chase being the largest. There are a few unexpected companies on the list, such as the mining giant - the BHP capital group, and the oil and gas company Woodside Petroleum. The median increase in the revenues of these 30 companies is 12,8%, which is above the market average, while the median ROIC / ROE ratio is 13,6%, which is slightly above the global average. It is therefore a high-quality basket. Sales analysts have adopted an average target price of 20% above the current price for a 138-year overall median return of XNUMX%, which is better than the MSCI World Index.

As you can see from the results below, our basket achieved an overall return of 250% compared to 101% for the index MSCI World since its inception (December 2015), however, this clearly reflects the survival error and selection bias as this historical result is not an indicator of future performance.