Women in IR: Q&A with AXA IM’s Julie Lamirel

Paris-headquartered AXA IM has launched the MiX In Perspectives fund, with approximately €10 mn ($12 mn) of assets under management, which invests in companies displaying the highest levels of gender diversity. IR Magazine recently caught up with the fund’s portfolio manager, Julie Lamirel.

What is the fund’s investment process?

Starting from a global investable universe of about 6,800 stocks in developed and emerging markets across the market cap spectrum, we initially use a specific quant screen on female executives and board diversity to exclude companies that have poor ESG scores and can be subject to controversies such as violation of human rights, labor rights and environmental matters.

We don’t look at gender diversity in terms of absolute metrics, but rather how it trends over time, as this tends to correlate with improving fundamentals. We want to track how a company is progressing regarding its diversity policy. We then do an in-depth fundamental analysis, to make sure the company has the growth and profitability attributes we’re looking for.

We rely a lot on our internal research; this means we take a 360-degree approach looking at a company from both a fundamental and a sustainability angle. We dig into a firm’s diversity policy and how this plays out in its growth strategy. We don’t just look at diversity as a stand-alone topic – it needs to be linked to growth. Our aim is to construct a portfolio of 50 to 60 stocks where positions are determined on a risk/return basis, with the objective of maintaining a very stock-specific risk profile and a robust footprint in terms of impact outcomes.

Which kind of academic research underpins the fund’s objective?

There is an abundance of academic research on this topic published by universities including Columbia and Harvard, consulting firms such as Deloitte, McKinsey, BCG and EY, and think tanks such as the Committee for Economic Development and the Petersen Institute. There has also been some interesting research carried out by Credit Suisse, Morgan Stanley and UBS. 

In addition, we’ve seen corporates start to produce their own internal research on gender equality. Sodexo, the French business services company, is showing that its gender-balanced entities outperform unbalanced entities in brand awareness, gross profit and revenue growth, for instance. This has helped us generate some lateral thinking and explore broader diversity topics.

What type of clients do you target for this fund? Has it been popular ?

The fund is targeting a broad base of investors both on the institutional and the retail side. We have seen growing interest from large pension fund clients whose objectives are to align their long-term investments with the UN’s Sustainable Development Goals, one of which is to promote gender equality. On the retail side, many individual investors are also seeking positive social impact in addition to traditional financial return. We believe this fund will increasingly appeal to investors that are aiming to actively align their portfolios with their convictions on ESG issues.

There’s been something of a spotlight on gender diversity in boardrooms (and greater diversity in general). How much of that do you see as being down to pressure from investors?

Investors have scrutinized the profile of board members for some time, in terms of their independence, the length of their mandate and the diversity of their profiles. Diversity has been one of the many criteria for assessing good board governance.

In some countries, gender diversity in the boardroom is governed by law – in France, for instance, there’s a 40 percent quota – so investors keep a strict eye on the figures. More recently an Australian investor has taken a radical position of voting against all-men boards. I believe it’s fair to say the focus has been more on the board, but investors are aware that getting women to board level requires them to be supported throughout their career. Companies have made an effort as part of their socially responsible reports to disclose figures of female representation at various leadership levels.

Diversity is therefore a criteria for assessing a company’s ESG profile, which has become mainstream to fundamental research. In other words, diversity is on investors’ minds and is now used broadly to make investment decisions.            

What advice do you have for IROs looking to target funds such as MiX in Perspectives?

For many companies, diversity has become a strategic goal because they see it as a strategic element in the workplace, in assessing management, and a key differentiator in the market when it comes to addressing ethnic minority issues and the female condition. We’ve also found that when firms have a gender diversity policy in place, IROs generally tend to be very keen to talk to investors about it, as critical evidence of good talent retention and corporate governance.