Introducing Introducing Introducing

Introducing the Women in Leadership theme basket

Equities 5 minutes to read
PG
Peter Garnry

Head of Equity Strategy

Summary:  ESG is high on the agenda among companies and investors. Often the focus is only on the E as the environment is a key concern for policy markers due to climate change, but our new equity theme basket is focusing instead on the S (social) through women leadership. We have created a basket consisting of 30 companies with high percentage of women in their leadership team representing $1.1trn in market value. Recent research suggests that companies with a higher degree of gender equality in their leadership team perform better both on fundamentals and in the equity market..


Why women leadership?

Today we are launching our next equity theme basket focusing on women leadership. Why would do we need a women leadership basket? We are currently running an investor theme focus on ESG and the percentage of woman in companies’ executive team is part of the social aspect of companies. Recent research (here and here) also shows that there are mostly positive impact on company performance from having a more gender diversified executive team. This research from S&P Global also show that publicly listed companies with more women in the leadership team performs better.

The histogram below shows the distribution of women in percent of leadership teams among 2,600 companies with a market value above $5bn across North America, Europe, and Asia. The median percentage of women executives is as low as 14.3% with very few companies having gender equality. This figure is arguably very low and shows the big change that will undoubtedly unfold over the coming decades. However, in the meantime there are several companies that already have gender equality in their leadership team and these form the basis of our women leadership basket.

Source: Bloomberg and Saxo Group

Women leadership basket

The basket consists of 30 companies with 10 companies each from North America, Europe, and Asia Pacific (developed countries). Companies with a market value below $5bn have been excluded from the list. The average percentage of women in executive leadership across the three geographical areas is 63.2% (North America), 52.9% (Europe), and 59.7% (Asia Pacific).

The 30 companies represent $1.1trn in market value with JPMorgan Chase being the largest company in the basket. There are few surprising names on the list such as the mining giant BHP Group and oil & gas exploration company Woodside Petroleum. The median revenue growth across these 30 companies is 12.8% which is above the market average and the median ROIC/ROE is 13.6% which is slightly above the global average. So overall, good quality basket. Sell-side analysts have on average a price target that is 20% above the current price and the median 5-year total return has been 138% which is better than the MSCI World Index.

NameMkt Cap (USD mn.)Sales growth (%)ROIC (%)Diff to PT (%)5yr return
JPMorgan Chase & Co429,430-2.018.319.291.6
BHP Group PLC165,02441.733.7-4.9141.7
Investor AB65,187201.339.910.8151.5
Block Inc48,729118.84.2128.2627.0
Lululemon Athletica Inc39,63143.936.542.4358.7
Hang Seng Bank Ltd38,244-15.09.711.520.3
DNB Bank ASA35,632-17.010.23.887.4
Koninklijke DSM NV31,73613.87.020.2199.4
Wolters Kluwer NV25,797-2.416.78.3178.6
CDW Corp/DE24,66512.126.718.6273.4
ViacomCBS Inc20,4599.512.350.8-46.1
Etsy Inc17,69161.720.674.3979.2
Woodside Petroleum Ltd16,862-7.13.516.14.3
Next PLC13,41721.727.215.6133.2
REA Group Ltd13,13413.131.118.0188.0
Xero Ltd11,46119.71.327.8499.3
Booz Allen Hamilton Holding Corp10,9852.418.120.3145.9
FinecoBank Banca Fineco SpA9,8696.020.519.2189.8
CapitaLand Integrated Commercial Trust9,44476.34.125.628.3
Ascendas Real Estate Investment Trust8,65912.54.922.751.1
Jazz Pharmaceuticals PLC8,30125.63.647.113.0
Tenet Healthcare Corp7,83911.516.226.7300.1
Castellum AB7,833-0.23.518.8114.1
Bright Horizons Family Solutions Inc7,1440.74.933.968.3
GDS Holdings Ltd6,82737.41.3115.1361.2
Stockland6,535-2.05.320.219.6
ASR Nederland NV6,42538.614.89.0111.0
Orion Oyj5,623-7.026.45.40.7
Crocs Inc5,51972.862.4121.01,198.9
Minth Group Ltd5,11919.810.334.354.2
Aggregate / median1,103,22312.813.620.2137.5
Source: Bloomberg and Saxo Group
* ROIC is used for non-financial companies and ROE is used for financial companies

As the performance below shows our Women in Leadership basket has delivered 250% total return compared to 101% for the MSCI World Index since inception in December 2015, but this obviously reflect a combination of surviourship and selection bias as thus historical performance is not an indicator of future performance. 

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract) and Type 3 Regulated Activity (Leveraged foreign exchange trading) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.