Covid-19 has fundamentally changed the global paradigm, and its consequences are visible in virtually every facet of our lives. The growing interest in social risk and human capital management and the enthusiasm for ESG and socially responsible investing have done so increased worldwide.
In 2023, the majority of assets under management in Europe, worth around €7 trillion out of a total of €12 trillion, assigned to ESG funds or strategies with a sustainability focus.
There are various studies regarding asset management in this sector show that women are even better investors than their male counterparts and have the ability to make more profits. That’s why it’s essential to take a deeper look at women in asset management and the existing gender gap in this sector.
Positive outcomes of women’s inclusion in asset management
First of all, women exhibition greater efficiency in every allocation of funds. She to perform better as investors, preferring a ‘buy and hold’ strategy. Unlike men, women show a reduced tendency towards impulsive and emotional decision-making in the stock market, with an emphasis on thoughtful decision-making.
Even more important is the increase in ESG-driven investments stemmed emerged from women’s initiatives and acted as one of the essential drivers of change. A study conducted by Goldman Sachs revealedFor the first time in 2020, European funds managed by female or mixed teams outperformed funds managed exclusively by men. This event could serve as further evidence of the positive impact of women on the asset management industry, which stands out for increasing gender diversity in the industry. The presence of women in this sector therefore not only brings profits, but also socially important changes.
Nevertheless, even as the ESG investing industry is emerging and women are asserting their importance in it, it is still largely male-dominated. constituent a minority among investors and asset managers. And even in 2023, the problem of the gender gap in this occupation still exists. According to the 2023 factsit has been found that only 20% of portfolio managers in Spain and Italy are women, and only 5% of women hold senior management positions. The statistics in Britain and the US are even worse: 11.8% and 11% of workers in this sector are women respectively.
Why does gender inequality still exist?
History lessons state that initially every job was characterized by a dominant number of men engaged in all kinds of activities. The financial and asset management industries that emerged later were no exception. Certainly, the number of women in the sector is growing year after year. Nevertheless, more time is needed to even out this imbalance.
Furthermore, the belief that investing is more of a “man’s job” still exists in society, and is very widespread around the world. On the other hand, this problem has deeper roots. Since ancient times, it has been considered proper for a woman to do housework and care for the entire family. This bias creates another barrier to having a full-time job outside the home.
This belief prevents some women, despite their excellent abilities, from starting a career in a particular financial environment or climbing the career ladder. Even if a woman gets a job at a company that deals with finance, investments or asset management, she may still feel vulnerable due to the imbalance in representation and the lack of women in senior management or C-suite positions. Moreover, it is especially important to start with to feel supported in a company and to have a role model to look up to, which is often difficult if there are no or few female representatives in the team.
How to tackle the problem of inequality
Asset management reports reveal a striking revelation: by 2025, an estimated 60% of Britain’s wealth will be owned by women. Given this fact, it is becoming increasingly clear why the deep-seated problem of the gender gap needs to be addressed.
Actions to address this issue must be very concrete: asset managers must proactively implement measures such as enabling more female managers to oversee wealthy families, individuals and foundations. A good example of this is The Diversity Project Europe (DPE). One of its fundamental objectives is to build a more inclusive asset management industry across the region. Furthermore, this project helps companies achieve a more gender-balanced workforce and promotes social mobility among all genders. Our society needs many more of these illustrations to pave the way for women in the financial sector.
So the main solution to this thorny issue is diversification, which is essential in the field of investing and asset management. By embracing this, it becomes imperative to promote greater participation of women in asset management careers, ensure equal opportunities for advancement and cultivate an inclusive environment. Following the example of the DPE, an increase in the recognition of women is expected in the long term and the structural barrier of gender inequality will be removed. This involves the introduction of training programs to address gender biases and stereotypes in recruitment, promotions and decision-making processes, as well as support for women to pursue careers in the financial sector and asset allocation.
These crucial measures are critical to promoting gender equality within the sector. In addition to being beneficial to the sector, women are also critical to strengthening and increasing the resilience of the asset management framework, especially investments related to ESG. The sooner leading companies recognize the importance of increasing the female workforce, the more beneficial this will be to their long-term profitability.