L&G Future World Gender in Leadership UK Index fund

green traditional weighing scales in a circle

Niche exposure

This is one of the few funds that specifically looks for gender-diverse companies helping to drive equality within the workforce

green family icon in a circle

Combats gender inequality

Allocates capital towards companies that recognise the benefits of gender diversity, helping to combat inequality altogether

Active engagement

The fund takes an active role in engaging with companies to address issues, with voting  playing an influential role

green sign with an upwards arrow in a circle

UK’s largest companies

Exposure to some of the larger UK companies such as GSK, Unilever & Astra Zeneca will help the fund benefit from steady cash-flows.

The Fund

This fund is a passive index strategy, seeking to provide a combination of income and growth by tracking the performance of the Solactive L&G Gender in Leadership UK Index. L&G Investment Management (LGIM) believe there are company-specific and market-wide benefits of having a diverse workforce. The company itself has a public target to achieve gender parity of 50/50 in its leadership team by 2020. The fund is still small with fund size standing at around £55m.

Gender Diversity

The fund has exposure to 350 of the UK’s largest companies and will allocate capital towards companies that recognise the benefits of gender diversity, tracking the LGIM-designed index. The funds internal framework ranks companies based on metrics identified as important in promoting gender diversity. Companies must achieve at least 30% representation of women in the following four measuresto achieve a high positive score from LGIM:

  • Board of Directors
  • Executives
  • Managers, and
  • Workforce

The index is then tilted towards companies with higher gender diversity scores and invests comparatively less in those with lower scores.

As more companies report gender pay gap data, LGIM will consider incorporating this factor into the fund’s scoring methodology. While there are other gender-focused funds available to investors, this is thought to be the first one that focuses entirely on the UK stock market.

LGIM believe the best business decisions are made when there’s a diverse group of people debating and challenging them. Increasing gender diversity means different perspectives get heard, which can lead to better outcomes for the customer, company and society. It is estimated that establishing gender parity could add £180bn to UK GDP.

Example holdings

Slide to view more
Holding
What they do
Royal Dutch Shell One of the world’s largest oil majors and the biggest FTSE constituent, this company is involved in both upstream and downstream oil and natural gas production. Following the large sell-off, the company now boasts a dividend yield of 15%.
Astra Zeneca A large UK healthcare business with a large degree of international diversification. The company engages in the research, development and manufacturing of pharmaceutical products and is set to benefit from the world’s ageing demographic.
Diageo An international drinks producer and distributor with well-known brands such as Johnnie Walker, Smirnoff and Ciroc as part of its portfolio. The company benefits from a rich history and is aiming to expand its presence in emerging regions.