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Women in Leadership: The Nordics are leading the transformation

Equities 8 minutes to read
Picture of Peter Garnry
Peter Garnry

Head of Saxo Strats

Summary:  March 8th is International Women’s Day, making it timely that we revisit our Women in Leadership investment theme. While there is a growing evidence that a higher share of female executives is good for long-term equity returns, our basket did not reflect that over the past year. Our revisit of the basket has also led to 12 companies being substituted in the basket. A key observation on the theme update is that the Nordic countries are overrepresented relative to their size in equity markets with six companies in the 20 stocks basket.

Past year performance and revisiting the case for leadership diversity

We launched our Women in Leadership investment theme because we wanted to make a different point on ESG than the classical ways of forming ESG portfolio. The “E” was already covered well across our renewable energy, green transformation, and energy storage themes, so we thought that we could make an interesting angle on the “S/G” and here our view was to highlight companies with the highest share of female executives across the daily executive management team and board of directors.

There is a growing evidence in the literature that gender diversity in the executive body of a company adds to long-term performance, and the Credit Suisse note Higher Returns with Women in Decision-Making Positions from 2016 links to a lot of great information on this observation. Just like we diversify portfolios for better risk-adjusted returns, management teams should also be diversified across gender, age, and other characteristics to ensure decision-making includes different perspectives. While the literature is mixed on men’s overconfidence, due to the scientific question of how can we actually isolate this effect properly, we do have strong evidence of over-confident behaviour among men in trading and investing compared to women. If this trait extends into general decision-making behaviour, we can see why companies dominated by men could lead to sub-optimal decision-making and thus bad long-term performance.

March 8th is International Women’s Day, making it timely that we revisit the case for more female executives. While there is good case to be made in terms of equity returns from companies with a higher share of female executives, we have not seen that over the past year in our investment theme. The Women in Leadership theme has performed in line with the MSCI World Index since the last International Women’s Day on 8 March 2022, declining 1.3% compared to a decline of 1.2% in the MSCI World Index. The five-year performance looks better, but here, as with all our other themes, we have to be aware of the selection bias used in our investment theme selection process. The stocks selected at the inception of each new theme are the ones with the highest market caps. This tends to inflate historical performance, underscoring the conventional wisdom that past performance is not an indicator of future performance.

20230303 Women in Leadership basket vs MSCI World 1y return
20230303 Women in Leadership basket vs MSCI World 7y return

Basket update and the Nordic leadership on female executives

In this year’s update to the Women in Leadership investment theme, 12 companies have been substituted. The new investment theme is shown in the table below, representing a combined market cap of $860bn and a median percentage of female executives of 55%. The median revenue growth rate for these companies is 17% compared to a year ago, and the companies generally have a high operating margin with the median close to 22%. All stocks have a positive spread to the price target meaning that those price targets are above the current price.

An interesting observation is that Norwegian companies are heavily overweight in this theme with four companies and, with Swedish-based Investor and Danish-based Novozymes added, the Nordic countries represent 30% of the companies in the basket. This highlights that the Nordic region is leading the transformation towards a higher share of female executives.


The selection criteria for this basket are companies with a market cap above $10bn, publicly listed in North America, Europe, Singapore, Australia, Japan, Hong Kong, or New Zealand, the number of female executives* is above three to avoid the percentage number to be inflated by a small management group, and finally a market cap filter from highest to lowest. The 20 companies at the top after applying these filters are selected for the basket.

Click to see updated performance of shares in the Women in Leadership investment theme

* The definition of a female executive is whether the person is a member of management or the executive body including board of directors


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