Investment teams in the top quartile of gender diversity outperform the bottom quartile by 45 basis points yearly in terms of net excess returns, according to a new report by WTW.
The report, which analyzed data from more than 1,500 investment strategies and more than 400 asset management firms, found while 80 per cent of asset managers have a formal diversity, equity and inclusion policy, only 42 per cent have any measurable objectives in their current policy.
More than half of asset managers are members of industry diversity initiatives (56 per cent) and have targeted initiatives to attract more senior diverse talent (51 per cent). The majority (83 per cent) of firms reported senior leadership is accountable for DEI.
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In terms of the most common diversity factor they consider, 84 per cent of asset managers cited gender, followed by ethnicity (72 per cent), disability (31 per cent), nationality (28 per cent) and sexual orientation (21 per cent).
“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 Chris Redmond, head of manager research at WTW, in a press release. “We are hopeful that the truly extraordinary investment performance benefits linked to superior diversity can serve as a catalyst for acceleration. That is why we believe it is crucial to analyze the data on an ongoing basis to track where we are as an industry and to stimulate conversations.”
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