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Practice Management > Diversity and Inclusion

Morgan Stanley Gives Advisors Gender-Diversity Toolkit

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Morgan Stanley (MS) is sharing more tools with its 15,000-plus advisors this week, including some aimed specifically at investors who want to boost the role of women in their portfolios.  

The Morgan Stanley Gender Diversity Investment Framework lets investors minimize exposure to companies with poor gender-diversity records, for instance, so they can better align their investments with a core value or social mission. They also can ask their advisors to use gender-diversity criteria to identify companies with potentially better risk/return profiles, the firm said. 

“The framework relies on our work with [our] asset-management partners, who have helped us make these options available within separately managed accounts, with mutual funds and with other products,” said Lily Scott Trager, director of Investing with Impact for Morgan Stanley Wealth Management, in an interview.

The gender-diversity framework, she added, is available to all investor clients, regardless of the asset level of their accounts.

“The framework is how advisors can deepen connections with clients through a [particular] investment option or strategy, which can help clients with their financial goals and by empowering them around their values and ESG [environment, social and governance] objectives,” Trager explained.

Broader Trends

The effort announced this week builds on Morgan Stanley’s Investing with Impact Platform, introduced in 2012, which includes about 130 investment products.

“Large institutions, such as Morgan Stanley, have a unique role to play in helping to create change and influence the direction of the broader investing with impact space—as investor interest continues to grow in size and sophistication, so does our platform,” said Hilary Irby, head of Investing with Impact for Morgan Stanley, in a statement.

In May, Morgan Stanley’s Sustainable + Responsible Investment (SRI) and Global Quantitative Research teams shared data based on a proprietary gender-diversity framework it complied, which ranks more than 1,600 stocks globally.

“This new approach demonstrates that more gender-diverse companies offer similar return with lower volatility, with significant implications for investment and corporate behavior,” the firm said earlier this year.

“In essence, companies that screen better for gender diversity metrics are higher-quality companies using our other standard financial metrics,” explained Adam Parker, chief U.S. equity strategist and the lead author of the report, “Putting Gender Diversity to Work: Better Fundamentals, Less Volatility.”

Earlier in September, Veris Wealth Partners and Women Effect said Gender Lens Investing (GLI) assets under management in public market equities and debt have grown fivefold since 2014 to $561 million.

As of June 30, there are 15 GLI equity and debt solutions, up from nine as of Sept. 30, 2014.

More than half of the growth in assets has been in the Gender Diversity Index ETF (SHE), which is sponsored by State Street Global Advisors. The ETF was launched in March 2016 with $250 million in seed money provided by the California State Teachers Retirement System (CalSTRS).

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