Investment teams with greater gender diversity secure an extra 45 basic points (bps) a year in net excess returns.
Analysis of more than 1,500 investment strategies by WTW showed that teams in the top quartile of gender diversity significantly outperform those in the bottom quartile. In equity and credit asset classes, the gender diversity premium was 46bps and 14bps a year respectively.
However, additional data from more than 400 asset management firms shows that only 42% of asset managers have any measurable objectives in their diversity, equity and inclusion policies, while 49% have no targeted initiatives to attract more senior diverse talent.
WTW said that while the industry has largely focused on gender and ethnicity to date, it is now calling on firms to expand data collection to cover disability, sexual orientation, socio-economic diversity and neurodiversity.
“There has undoubtedly been progress made on diversity by many asset managers in recent years but the fact is that the pace of change at an industry level is still slow and disappointing,” said WTW head of manager research Chris Redmond. “We are hopeful that the truly extraordinary investment performance benefits linked to superior diversity can serve as a catalyst for acceleration.”
