Pax Ellevate Global Women’s Leadership Fund (PXWEX)

In this episode, I interview Jenifer Cannon, the Vice President, Business Development, at Impax Asset Management LLC and Pax Ellevate Global Women’s Leadership Management. We discuss the Pax Ellevate Global Women’s Leadership Fund (PXWEX) which uses a gender screening on the fund.

You can get more information at: https://paxworld.com/pax-ellevate/

Jenifer Cannon is Vice President, Business Development, at Impax Asset Management LLC and Pax Ellevate Management. She supports marketing and sales initiatives for the Pax Ellevate Global Women’s Leadership Fund, and she helps financial advisors build their practices by expanding their relationships with female clients.

Here is the transcript for this episode:

In this episode I’m going to talk with Jennifer cannon from PACs mutual funds she works with the tax elevate global women’s leadership
Mutual fund this is impact Financial Planners making sustainable
Responsible impact investing easy for socially conscious investors who want to make a positive change
through their investments impact Financial Planners is a fee-only financial planning firm specializing in
sustainable responsible impact investing and
Impact Financial Planners calm. Alright, thank you for joining me on this episode
I’m gonna have an interview with Jennifer cannon. She’s the vice president of business development and
impacts
asset management and I guess they merged with packs mutual funds and she works on the
packs elevate elevate global women’s leadership mutual fund
She helps financial event advisors build their practices by expanding the relationships with female clients
she’s been in the financial industry since
1994 and worked with fidelity Putnam Schwab, Boston Foundation, New Hampshire, Charitable Foundation
She has quite a bit of experience. Alright, let’s go to the interview
Alright Jennifer. Thanks for joining us here on impact Financial Planners
I guess could you describe a little bit I know pax has about 12 funds
You’re involved with the packs elevate global women’s leadership fund
Could you describe its strategy how that fund works sure bill
The packs elevate fund has been around for about a little over five years
Our anniversary was last month and it was founded on the principle that gender diversity plays a critical role in business
success over time and that
investors in these companies
that advance women actually can do well and we have multiple studies actually over 60 studies on our site that shows that and
So what we set out to do with this fund is really show in real time that by investing in these companies
We would be able to outperform
The indices that we were going against and so it’s a broadly diversified
Mutual fund that invests in the highest-rated companies in the world for advancing women through gender diversity on their boards and executive management
We refer to it as a sort of a smart beta strategy where the factor is gender
It’s an optimized index fund in the index that we use is the MSCI world
so we take all the companies in the MCI world and
we
rate them with our proprietary gender score
And then with that we take the top 400 of those companies invest in them
So that’s sort of an overview of what the fund is
When we started about five years ago
People that were a little crazy with this idea
But you’ve seen tremendous growth within the industry on gender lens
Investing and we’re proud that we were the pioneer the first fun to do this
the oldest fund and now the largest fund
Yeah, actually, could you come in just a little bit about I mean PACS has been around a long time
Have several funds and in different areas
I know you’re focused on the elevate women’s but they’ve been doing
It or been involved in this ESG esri world for quite a bit
You’re you’re right bill. So PACs world
became
started in 1971 with the very first social
Responsible fund which is what they called it back then
It was actually two ministers that were
Protesting the Vietnam
War got together and said I want to find a way to align my values with my
investing and a concept back then was
Completely unknown and we launched this and so if you look at our suite of funds and we manage about 17 billion
Assets now because we merge with an organization called impacts asset management based out of London
About a year and a half ago
And so we have 12 strategies in the US and then we have some other strategies in Europe
but if you look at our 12 strategies in the US where all of those funds are using an ESG screen and
The two themes that we really focus on as an organization
In terms of the issues we want to move the needles needle on are
Obviously gender inequality issues and then the second one is really around environmental issues
And so we have a fund that focuses on investing in companies that are finding solutions for a more sustainable environment
and then we engage with companies around environmental issues so that they’re preparing themselves for
What this changing economy is going to look like
What climate change means for an organization all of those key issues? So you’re exactly right. We’ve been around since
1971 or a pioneer in the space and we have about 12 different strategies
great, and so with this
elevate women’s leadership fund
You’re focusing on women leadership
But then is that overlaid with the ESG screening or other screens as well?
exactly, right so all of our funds at PACs as I mentioned or call ourselves impacts now have an
ESG screen and so if you look at our process for this fund, you know
We start with all of the companies in the MSCI world and we immediately apply an ESG screen and take out the laggards
there’s two really key issues that we don’t invest in in terms of companies that are involved in tobacco or
in
Firearms and that’s both making the firearms as well as distributing them
so we are removing the laggards from an ESG screen and
With that, you know, we’re left with those holdings. Then we will apply our impacts gender score so that that would drive
the top 400
Gotcha
How about just could you describe a little bit about the balance of
The global Women’s Fund does it how much is in u.s. Is a mostly large cap
what’s the
District of the fun. Where would it fit in a portfolio?
well, we call it a global large cap equity and I’ll give you the exact breakdown so that you have them but it’s
Obviously if you look at the MSCI world, we’re trying to sort of track closely to that
So I think the exact number for the US portion is 68 percent
Europe and the Middle East is 24 percent and then if you look at the Pacific
that’s where you see a
difference between
The actual index and we’re invested about four point four percent and one of the challenges that you see with
Pacific is Japan and
Unfortunately, if you look at Japan at this point in time
You don’t see a representation of women in leadership or on boards of directors in these organizations
And so because of this we have a very little exposure there. So you’re trailing what the index has in Asia?
Quite a bit. I would say
we’re not trailing I would say we’re
under weighted that than the index because of the fact that when you factor in gender for these organizations,
They just don’t have it there, but I’m optimistic that that will change
Yeah, no that makes perfect sense
And then so screaming is apart. How about corporate engagement?
Do you what’s your process for engaging with the companies that you hold?
so bill engagement is
everything to us
You know, we’ve been engaging on gender
Way before we even launched this fund because we feel if you look at gender inequality across the world
It looks different everywhere, but it’s a major human rights issue
And so we’ve chosen to use that as shareholders as a platform to really educate
Companies as well as sort of push them to make some changes so that there’s more gender equality
And so if you look at our engagement work around gender it really kind of falls into two buckets
the first is as shareholders are looking at diversity and so since about
2010 we voted down over
1200 all-male boards slates and that’s really across all of our strategies
domestically and
We’ve filed multiple
Petitions with organizations that have all male board slates and when we wrote that down, you know, we do offer them
the opportunity to talk about why we voted that down and have a conversation about what best practices are and why we think it’s so
important to have a structure in place that allows for more diversity
But I can take a while
I look at an organization like Roper technologies when we first voted down there all male board slate
they were looking for four ways to transition to a more diverse board and
We had ongoing
Conversations and multiple years later they were able to have I believe it was three women on the board and growing
So those are the type of conversations that we have. It doesn’t happen overnight
It’s an ongoing one the other issue when you look at gender
Inequality in terms of our engagement is on Pay Equity
Pay Equity is really important and what we do is we reach out to companies and really
Nicely encourage them to do pay equity assessments and we hear more and more about that in the news now
but when we began these conversations with organizations some of the largest organizations and in the world
that really wasn’t a
Conversation that they’d been having and so we did get some pushback saying you know, why is this your business?
Why should we be doing this?
What’s the value of this but then you see some organizations that?
Really have led the way whether it’s Apple or Amazon or others that have done pay equity
assessments and then have taken it one step further and what we like to see is actually
Publish those results because when you shine a light on those results what happens you have to start to make change
because people are watching and so that is
The other issue that were really advocating for in engaging with companies around so some of that are quite a bit of that is education
From the very beginning about how to do that why we’re looking for them to do it
And you’ve seen just tremendous results for companies that have done it
Okay that have seen those gaps fix those gaps and made the commitment to do
Ongoing assessments and your process is just if you own shares you’re engaging with that company
Hoping that that’ll that’ll be it. And if they don’t make changes or don’t publish results to you
I don’t know push them further with the resolution, and I’m not sure what laughing
Yeah, so we don’t want to have you know
Obviously, we don’t want to get to the point where we have to show up at a shareholders meeting. That’s sort of the last step
But if an organization and very few
Very few are not willing to engage
so if an organization is not willing to engage then we will attend a shareholder meeting and then
Present on why we think this isn’t very important
And that’s happened twice in the last couple of years and the organization that we’ve gone to
Has been Oracle and where we’ve each year seen more of the independent shareholders
interested in this
But we still haven’t gotten to the place where we want to be
Does that once you bring up a shareholder resolution then do you have to reach out to other?
Shareholders to get support or is that pretty? Well, we’re at the shareholder meeting
So when they hold their yearly shareholder meeting and this would happen to be in November
You know, you have a lot of them that are there and listening
but again
That’s very rare
most company are willing to engage and willing to have a conversation and our
Expectations are not that it happens overnight. We understand it’s a process
Going into a pay equity assessment. It is a big deal
and there’s it takes time to
Structure how that assessment is going to occur to actually do the assessment and then to analyze the results
great, I I
noticed that the last especially five years you’ve had really
outperforming I
Guess you’ve been outperforming the index. Do you have any is there a reason do you know why that is happening?
Well that five number five year number is unique. We had a gender lens
strategy prior to the launch of this fund in
2014
We purchased an actively managed strategy
Which was very different from what we have right now and so the five year number that you’re seeing
Still reflects I think one year of of that strategy
but in 2014 when we
relaunched this
We’ve had excellent performance. We’ve been really pleased with our ability to perform and that when you look at the actual performance
What is so interesting and exciting for all of us to see is that the gender leaders? So the top?
Gender leaders and then in this portfolio are the ones that are driving performance
We call it the gender attribution and we take a look at that on a regular basis and you
Consistently see how it’s proving out real-time all of the studies
that we
Researched and that have been published about how companies that have more diverse leadership teams
perform better in multiple different ways
So that’s why we feel that the fun has done well and really because of the gender lens that you’re putting on it
Exactly. That’s what’s driving the performance for the most part
Do you see that the this the gender lens is changing I?
Guess getting you off of the index at all. Do you see that? You’re
Not over underweighted in certain industries
I was just thinking of some industries that maybe don’t have a lot of gender diversity or are you pretty well?
Diversified in all the sectors. No, there are some areas where we’re over weighted in some areas where we run waited
I’ll give you some examples. So
if you look at like energy and
materials we tend to be under weighted and that
some of the technology companies so we refer to them as
Communication services were under weighted and then one that people are always really surprised to see it is in healthcare
And that’s where you just see a lack of women
In leadership positions, I think that’s changing but we haven’t seen them
And again, we look at these companies on an ongoing basis
but once a year in November is when we do what we call our
reconstitution and that’s when we do a deep dive and re-rate all of these companies and so during that time period
You’ll see these sector weights change a little bit depending on the success and what’s happening within the industry
But that’s where we tend to be a little under weighted just because of the lack of women represented in leadership
But you know, you look at companies like utilities and we actually are over weighted because it’s it’s funny
it’s fascinating to look at utilities that have
Women represented on their boards in in leadership positions
across the sort of the sector
So you’re exactly right?
You see some under weighting in various sectors similar to what I was saying about Japan where you just don’t have
A great pool to pick from and then some over weighting in some areas
That’s surprising though. Yeah, I wouldn’t guess that healthcare would be an under weighted situation, but
everyone said
right
I think if some of it is pharmaceutical
Within the healthcare field, oh
Okay, that makes sense I guess I guess
super well anything else you want to add where can people get more information so
Please feel free to you know, go on to the packs elevate
Website, which you can actually if you go on to the PAC’s world website
That’s the name of our mutual fund family within the impacts company
We have a ton of resources on there
My favorite thing is a video that you can find on the packs elevate
Page that says, you know basically investing like a feminist and what does that look like? Have you seen that bill? Yeah
It’s pretty powerful
And so for even the biggest sort of cynics out there that are sort of questioning what this means. And is this a niche?
They enjoy taking a look at that. And then for those of you who are more analytical we have like I said
I think over 60 different studies from
multiple different
highly respected organizations on
the benefit of having gender diversity and leadership teams
So I would encourage you to check that out as well
As you know on our social media pages were constantly sharing content as well
that would
Allow them to take a deeper look and sort of know about this space. I would just mesh with one thing bill
you probably know this just because of your expertise in the ESG field and
Being so tied in but the growth of gender lledon investing has been absolutely amazing if you look back in
2014 and
This was data that was published about a year ago
There was about a hundred million
Invested with a gender mandate and then as if you look at the data that was published about
2008 June of 2018
There was over 2.5 billion invested
Great. Oh, that’s wonderful. That’s great that it’s getting a lot of attention
And it’s moving the needle which is what we all want, right
Definitely know that’s super I will put a link in our show notes and I really appreciate your time
Thank you so much, Bill. Have a nice day. You too. All right. I hope you enjoyed that
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