At Pax World, we believe that investing in companies that invest in women is a smart investment strategy. Holding back half of the world’s population through unequal educational and job opportunities, unequal wages, let alone violence and oppression, is not only morally reprehensible, it’s bad economics.  Businesses that ignore what women can bring to the table are handicapping themselves and will eventually fall behind in the emerging global economy. Conversely, those that invest in and empower women will be advantaged. These latter will show themselves to be stronger companies and better long-term investments.

There is a significant body of research suggesting that companies that are successful in promoting women to the most senior levels of business tend to perform better than those companies that do not.  A 2011 Catalyst study of companies over the 2004-2008 time period showed that companies with three or more women corporate directors (in at least four of the five years) outperformed those with no women on the board by 84% on return on sales (ROS), 60% on return on invested capital (ROIC) and 46% on return on equity (ROE)1. An earlier Catalyst study found that the highest quartile companies in terms of percentage of women on the board outperformed the lowest quartile companies over the period of 2001-2004 by 42% on ROS, 66% on ROIC and 53% on ROE.2 Several other studies have likewise found that those companies with higher percentages of women on their boards or in senior management outperform those that lag in gender diversity3. This is particularly the case with a critical mass of women in leadership roles.4

There is also evidence that companies that are attentive to women as consumers do better: a 2007 paper by Goldman Sachs identified 30 companies—termed the “Women 30” index—that sell products primarily to women. This Women 30 index “has outperformed significantly over the past 10 years: total returns were three times greater than for global equities.”5

Gender equality in employment also boosts economies, as Goldman Sachs noted in the aforementioned study:

“Closing the gap between male and female employment would have huge economic implications for the global economy, boosting US GDP by as much as 9%, Eurozone GDP by 13% and Japanese GDP by 16%.”6

In all of our mutual funds, Pax World seeks to avoid investing in companies that we determine are involved in the exploitation and trafficking of women, whose products demean women or that use negative stereotypes in their advertising, promotion or marketing. Similarly, Pax World endeavors to avoid investing in companies that fail to provide a safe work environment for women by encouraging or tolerating harassment, as well as companies that have a history or pattern of discrimination or mistreatment of women, or other gender-related controversy.

Pax World addresses gender issues, including board diversity, through its proxy voting policies as well.  For example, when voting on director elections, Pax World has a policy of withholding votes from, or where possible voting against, all slates of director nominees that do not include women. Pax World then registers its concerns with the company through a follow-up letter explaining the reason for our opposition to the all-male slate and encouraging the company to take steps to promote gender diversity and add women to its board of directors.

We also engage in shareholder activism initiatives aimed at promoting gender equality and women’s empowerment.  For example, Pax World is a founding member of the Thirty Percent Coalition which is working to assure that women hold 30% of board seats across public companies by 2015.

Pax Ellevate Global Women’s Index Fund

In addition to the above gender criteria and initiatives, Pax World partnered with Ellevate Asset Management, whose principal is Sallie Krawcheck, to offer investors a broadly diversified mutual fund that invests in the highest-rated companies in the world in advancing women’s leadership – the first fund of its kind.

The Pax Ellevate Global Women's Index Fund seeks investment returns that closely correspond to or exceed the price and yield performance, before fees and expenses, of the Pax Global Women’s Leadership Index*, an index of companies around the world that are leaders in advancing women through gender diversity on their boards of directors and in management, and through other policies and programs.

The Pax Global Women’s Leadership Index is a customized index of the highest-rated companies in the world in advancing women, as rated by Pax World Gender Analytics, and that meet key environmental, social and governance (ESG) standards, as rated by MSCI ESG Research. Companies are rated by Pax World Gender Analytics based on multiple criteria of gender leadership, including:

  • Representation by women on the board of directors
  • Representation of women in executive management
  • Woman CFOs
  • Woman CEOs
  • Whether they are signatories to the Women's Empowerment Principles, a joint initiative of the UN Global Compact and UN Women.

These factors are given different weights, with representation by women on boards and in management receiving the highest weights. Companies comprising the Index also meet certain environmental, social and governance (ESG) or sustainability standards, as rated by MSCI ESG Research. MSCI ESG Research provides in-depth research, ratings and analysis of the ESG-related business practices of thousands of companies worldwide.

The 400 plus companies that emerge from this research and selection process are, in our view, the best companies in the world when it comes to advancing gender diversity and empowering women in the workplace.

The Fund generally invests in all of the components included in the Index, but may use an optimized or enhanced strategy to achieve its investment objectives, overweighting companies with more favorable characteristics – e.g., the number of women on the board of directors and women in management – rather than relying on market weights exclusively.

In our opinion, the Fund represents a market solution to a global business challenge: by helping direct investor capital towards those companies that are embracing gender diversity, the Pax Ellevate Global Women’s Index Fund provides an opportunity for investors to weigh in, and for companies to listen.

We believe we are at a tipping point. Eliminating gender inequality and empowering women are finally being recognized, on a global basis, as urgent moral and economic imperatives. We believe gender equality must become an investment concept – a key driver of business success, economic growth and investment returns.  In our view, companies that integrate gender diversity and women’s empowerment into their business models will be more successful than their less enlightened competitors. We want to invest in those companies, and we want our shareholders to benefit from their success.

*A custom index calculated by MSCI. One cannot invest directly in an index.


1 Catalyst, “The Bottom Line: Corporate Performance and Women’s Representation on Boards (2004-2008),” 2011. 

2 Catalyst, “The Bottom Line: Corporate Performance and Women’s Representation on Boards,” 2007.

3 See, e.g., Mary Curtis, “Gender Diversity and Corporate Performance,” Credit Suisse Research Institute, August 2012;  Andre Chanavat and Katherine Ramsden, “Mining the Metrics of Board Diversity,” Thomson/Reuters, June 2013; Mariam Schwartz-Ziv, “Does the Gender of Directors Matter?” Harvard University - Edmond J. Safra Center for Ethics, May 7, 2013.

4 V.W. Kramer, A.M. Konrad, and S. Erkut, “Critical mass on corporate boards: Why three or more women enhance governance,” Wellesley Centers for Women, Paper No.WCW11, 2006.

5 Kevin Daly, “Gender Inequality, Growth and Global Ageing,” Goldman Sachs Global Economics Paper No: 154, April 3, 2007: 16.  

6 Ibid.