According to a new study, the answer is yes, women led companies do perform better!
Quantopian compared returns of 80 Fortune 1000 companies that had or have women CEO’s with the average returns of the S&P 500 over a 12 year time frame. The women-led companies performed 226% better than the S&P 500 over the same period! That is a huge difference.
How that would play out in the real world looks like this:
If you invested $100,000 in a fund that invested solely in those 80 companies during the time women were at the helm, while I invested $100,000 in the S&P 500, at the end of 12 years you would have $448,151 and I would have $222,306. The results were so staggering the Quantopian is developing a trading algorithm to actually invest in women-led firms.
This isn’t the first study showing better results for businesses where women are in leadership. A Credit Suisse Gender 3000 study showed a 27% better return on equity when companies had at least 10% of the top positions filled by women compared with those with under 5% women at the top. These companies also paid out 42% higher dividends — which is when companies distribute profits to shareholders. This study encompassed 3,000 companies across 40 countries.
So now when I encourage you to invest in women — their companies, products, and ideas — you can see it as great investment advice, not just supporting women. It’s a great strategy. Level the playing field and get wealthy doing it!