Diverse Investment Teams Outperform, Says WTW

The more diverse the investment team, the better the investment outcomes, investment consultancy firm WTW has said. Its new paper, ‘Diversity in the asset management industry: on the right track but at the wrong pace’, collated diversity data from over 1,500 investment strategies and concluded that investment teams in the top quartile of gender diversity outperformed the bottom quartile by 45bps per year in terms of net excess returns. Broken down by asset class, equity and credit teams with greater gender diversity outperformed by 46bps and 14bps per annum respectively. However, progress is slow, WTW said, with additional data collated from over 400 asset managers on diversity, equity and inclusion (DEI) highlighting that only 42% of firms have any measurable objectives in their DEI policy. Further, 49% of asset managers have no targeted initiatives to attract more senior diverse talent. Chris Redmond, Head of Manager Research at WTW, said: “There has undoubtedly been progress made on diversity by many asset managers in recent years, but the fact that the pace of change at an industry level is still slow is disappointing. We are hopeful that the truly extraordinary investment performance benefits linked to superior diversity can serve as a catalyst for acceleration.” 

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