Women And Investing: Show Me The Money But First Show Me The Meaning! by Barbara Stewart

Barbara StewartAfter ten years of doing global research in the area of women and finance I have had in-depth conversations with over 700 intelligent female investors of all ages, professions, backgrounds, and personality types. I feel confident in saying that they all want to make money, but most of the women I have interviewed prefer to invest in causes and concerns that are meaningful to them WHILE making money.

From these interviews I would say that over three quarters of women follow this pattern, and that the percentage is rising over time. Although my research has focused on what I call “smart women”, these numbers and trends appear to be true of women in general: Morgan Stanley surveyed female and male investors in 2015 and 2017 on this topic (https://www.morganstanley.com/ideas/sustainable-socially-responsible-investing-millennials-drive-growth), asking “How interested are you in sustainable investing, which is the practice of making investments in companies or funds that aim to achieve market rate financial returns while pursuing positive social and/or environmental impact?”

In 2015, 78% of women said they were interested, and only two years later that number had climbed to 84%. Although my own research focuses on women, the survey found that men are less interested, with 62% in 2015 and 67% in 2017 expressing interest. Not only are women ahead, their lead is growing!

Show Me The Meaning: What Do Women Mean By Meaningful?

Ideas that will benefit society as a whole by promoting health, children’s welfare, gender equality, or other forms of social justice. Women want to take action and do something about today’s issues. Investing is a powerful way to accomplish this!

Women search for, and invest in stocks and funds that reflect their core values. Often these investments will be in what have historically been described as riskier assets than the average S&P 500 stock, but women knowingly embrace that risk since it reflects their beliefs.

Avery M. Blank is a consultant in Philadelphia: “I mostly manage my own portfolio of stocks and mutual funds and occasionally I check in with a financial advisor. Otherwise, I will invest in anything that has the potential to make a difference. I am always thinking “is this something helpful?” If I’m excited about it, this is a signal that down the road this might be important.”

Sarah Saska is the CEO of a strategy firm in Toronto: “For me (and for many of the women in my life), money and meaning cannot be separated. I work to take a socially-responsible lens to my portfolio and prioritize investments that have low carbon emissions, advance cleantech innovation, or support gender equality. I know that companies with a moral compass bring more value, both financial and otherwise, and I suspect that financial advisors will see this trend growing exponentially among female millennial investors.”

A few years ago, I came up with my own A Woman’s Propensity to Invest Equation (see next page).

Women want to invest their money in the things they are passionate about—an investment idea must engage them emotionally and resonate with their personal values.

Show Me The Money Women Invest To Make A Difference. But… What About Making Money?

Most ESG funds1 don’t yet have a long-term track record. I did some research for a global bank to determine how important this uncertainty about long-term returns is to female investors. My main question was: “How much rate of return would you be willing to give up (if necessary) for the greater good of investing in causes and concerns that matter to you?” Here are some comments from the study:

  • “I don’t think that an ESG fund will underperform. I would expect it to perform as well as the market. If it didn’t, I would reconsider.”
  • “If the market return is 8%, I would want my ESG investments to earn greater than or equal to 8%. Okay maybe 7% is fine. But if they are under-performing, I need to understand why. I would keep my 50% exposure in ESG but I would look for different funds that had better track records.”
  • “I would be willing to give up some rate of return in the short-term to be invested in my specific causes. But not forever because I need to make money.”

Clearly, making money still matters.

Investing Utopia For Women

In an ideal world, women would have the opportunity to steer their investment dollars towards causes or concerns they feel strongly about and at the same time earn a rate of return that is as good as or better than the traditional equity market.

Stella Dawson is a journalist and media strategist in Washington, DC: “I would love to ‘do good’ but I also need to make a good return on my investments. What if you offered me a choice between two opportunities with equivalent return potential but one was more ethical than the other? Now I’m interested.”

Susan McLean is a Senior Leader at MaRS Discovery District (the world’s largest urban innovation hub based in Toronto):

“I am a great believer that as investors we can use our assets and our investment choices to promote the changes we want to see in the world. There are a growing number of ways to engage in impact investing now while still getting competitive market returns. It’s not always easy to find them and I have been frustrated on several occasions by the limited interest and slow uptake of these types of investments by the mainstream financial industry. But I think that is changing, and will continue to change as both the supply and demand for impact investment grows.

While we are all investing in hopes of generating good returns, the fact that those returns can also be supporting the changes we want to see in the world is really exciting and I’m looking forward to a world where impact investment is mainstream.”

The Giant Opportunity

The giant opportunity for the finance industry is to let women know that their value preferences are understood and then show them how they can align their investment choices with their values. Although most banks and investment firms acknowledge the fact that women have become a financial force with impact, few seem to have adequately changed their investment model to meet women’s needs.

It isn’t so obvious where to find such ‘meaningful’ investment opportunities via traditional equity markets. We still seem to be more or less in do-it-yourself mode. In her June 2018 article for the Globe and Mail: “Will the transfer of wealth to women take sustainable investing mainstream?” Jennifer Reynolds, CEO of Toronto Financial Services Alliance surmised:

“It remains to be seen how significantly the transfer of wealth to women will affect traditional investment analysis and the allocation of capital. On a personal level, I apply ESG screens to my portfolio. One example: I don’t invest in companies that have no women on their boards. My investment decisions are in no danger of moving the market, but there may well be a growing number of women whose collective investment decisions will have an influence. Perhaps those shifts have already started, subtly affecting value and investment flows.”

Firms and advisors need to create deep value propositions that resonate with customers of all types if they want to remain relevant moving forward. They need to make things like applying ESG screens as easy as a click on a drop-down menu.

To attract female capital, the finance industry needs to successfully link what is personally meaningful to each woman with specific relevant investment opportunities. The money will follow.


Barbara Stewart, CFA is one of the world’s leading researchers on women and finance, focusing on real life financial behaviours and providing global insights into how smart women think and communicate. Barbara is an advocate for women, for diversity, and for financial education. In addition to her Rich Thinking® research, Barbara uses her proprietary research skills to work as an Executive Interviewer on a project basis for global financial institutions seeking to gain a deeper understanding of their key stakeholders, both women and men. Barbara is a frequent interview guest on TV, radio and print, both financial and general interest. She is a contributor to the CFA Institute’s Enterprising Investor website. For more information about Barbara’s research, please see www.barbarastewart.ca


1. ESG Funds are funds that have included environmental, social or governance factors into their investment philosophy.