Women-led super funds outperform again

Superannuation funds with significant levels of female leadership again outperformed funds dominated by men, and have increased their likelihood of doing so, Rainmaker research reveals.

Rainmaker assessed 66 super funds to derive a W-index score and contrasted this against the fund's MySuper or default investment option and its relative investment performance. The W-index is a weighted ratio that describes the proportion of each fund's senior leadership roles that are held by women - board chairs, chief executives, trustee directors or senior managers.

The study analysed not-for-profit super funds because these funds have trustee boards which directly oversee the product offerings and have chief executives and executive teams explicitly associated with the fund. Retail funds were excluded because many retail trustee boards oversee multiple super funds and multiple PDS-ed products and executives are usually employed by the wealth management company that sponsor the fund rather than the fund itself.

One-third of the funds in the study were found to have a W-index score of 30% or more. Rainmaker said that while this ratio is low it hasn't changed since 2015.

However, as a group these funds outperformed other funds by 48 basis points in 2015, by 20 in 2016 and 24 in 2017. This outperformance means $7 billion in extra value was potentially added to not-for-profit super funds.

Rainmaker said while this out-performance margin may seem slight, the more important indicator is that women-led funds not only again showed themselves to be more likely to outperform, this propensity to outperform has increased.

In 2015 the researcher found 63% of women-led funds achieved above average returns but by 2017 this outperformance climbed to about 70%. Male dominated super funds were in contrast equally likely to outperform as underperform.

In a hyper-competitive market, Rainmaker observed two out of three funds with higher than average levels of women leadership being likely to outperform can be a strong indicator of future success and a powerful differentiator.

Rainmaker's findings reinforce the results of a recently released study into the stock market trading performance of Finnish investors by University of NSW and Sydney University academics that found women traders consistently outperformed male counterparts.

Last year a study by Scandinavian bank Nordea of 11,000 globally-traded companies found that since the GFC, listed companies led by women achieved investment returns of more than double the global index return.

Super funds in Australia with the highest W-index scores in the Rainmaker study were HESTA, Care Super, AvSuper, VicSuper, REI Super, Club Plus Super, MTAA Super, Commonwealth Superannuation Corporation, Tasplan and Energy Super.

Rainmaker conceded its study may be effected by survivorship bias as women may be less likely to stay in their roles if their super funds are unsuccessful. Moreover, if a super fund represents members in a male dominated industry it is less likely to have a high number of women in leadership positions.

Financial Standard is the publishing division of Rainmaker Group.

Read more: RainmakerAustraliaAvSuperCare SuperClub Plus SuperCommonwealth Superannuation CorporationEnergy SuperFinancial StandardGFCHESTAMTAA SuperNordeaREI SuperSydney UniversityTasplanUniversity of NSWVicSuper
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