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Investors who wish to promote female empowerment no longer need to decide between their commitment to social impact and the pursuit of financial returns.
A handful of mutual funds and exchange traded funds (ETFs) have emerged in recent years that pledge to invest in either businesses led by women or companies that endorse gender equality and inclusiveness.
Those with a penchant for picking stocks (and a higher threshold for risk) can also purchase individual shares of companies that get high praise for family leave policies, pay parity, and other metrics.
And, they can potentially help to combat the lack of capital available to women entrepreneurs by investing in venture capital funds that provide seed funding to female founders.
“Impact investing can be really just a better way to invest,” said Scott Arnold, portfolio manager at IMPACTfolio in Denver, Colorado. “There is still that false perception that you have to sacrifice returns to align your portfolio with your values, but a multitude of studies have now been released that show you may get the same returns or better” by investing in solid companies that take environmental, social, and governance (ESG) factors into account.
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Socially Responsible Investing takes off
Investment strategies that seek to empower women fall under the broader umbrella of Socially Responsible Investing (SRI), a mutual fund and Exchange Traded Fund (ETF) category that has lost some momentum in recent years.
A Morningstar analysis of U.S. sustainable funds found that investors continued to withdraw from US sustainable funds in 2025, marking the third consecutive calendar year of outflows and the worst year on record since it began keeping track more than 10 years ago.1
Despite investors withdrawing money for three consecutive years, however, Morningstar reports that assets in US sustainable funds reached a record high at the end of 2025, driven by stock market appreciation. The new record of $368 billion surpasses the previous peak registered in 2021.
The performance of sustainable funds has been mixed.
After underperforming in the second half of 2024, Morgan Stanley’s Institute for Sustainable Investing found that sustainable funds generated median returns of 12.5 percent for the first half of 2025, compared to traditional funds’ 9.2 percent returns, marking the strongest period of outperformance for sustainable funds since the Institute began tracking data in 2019.2
Over a longer period, sustainable funds have outperformed traditional funds, it found. A hypothetical $100 investment into a sustainable fund in December 2018, for example, would be worth roughly $154 today, while investing $100 into a traditional fund over the same period would equate to $145 today.
ESG considerations are not just good for the planet. They can be good for business. Environmental stewardship helps management control costs and avoid damaging incidents, treating workers well helps companies attract and retain talent, and good governance leads to better corporate decision-making.
That said, investors should always be aware that past performance is no guarantee of future returns. A financial professional can be instrumental in helping investors select a portfolio that reflects their values and meets their financial goals.
If you’re eager to support businesses that are owned, founded, or led by women, these are four ways to make it happen.
1. Mutual funds and ETFs
Many socially responsible mutual funds and ETFs screen for inclusion and diversity. The following funds are some examples of funds that claim to be specifically designed to help women:
- Glenmede Women in Leadership US Equity (GWILX), which seeks to provide exposure to U.S. large capitalization companies that demonstrate greater gender diversity within senior leadership.
- Impact Shares YWCA Women’s Empowerment ETF (WOMN), which tracks the Morningstar Women’s Empowerment Index, owns companies worldwide with strong policies and practices in support of women’s empowerment and gender equality.
- Impax Ellevate Global Women’s Leadership Individual Inv (PXWEX), which invests in companies worldwide that advance women through gender diversity on their boards and in executive management.
- SPDR SSGA Gender Diversity ETF (SHE), which seeks to provide exposure to U.S. companies that demonstrate greater gender diversity within senior leadership than other firms in their sector.
In addition to these examples, other female-friendly fund offerings include those available through the nonprofit investment firm Calvert Impact Capital, which invests specifically to “create a more equitable and sustainable world.” The firm sells corporate bonds (or Community Investment Notes) and invests the proceeds for growth and social or environmental impact in intermediaries and funds around the globe that support underserved communities. (Related: Understanding mutual funds and ETFs)
Similarly, the Domini Impact Equity Fund (DSEFX) invests exclusively in mid- to large-capitalization stocks that meet its rigorous standards for social and environmental responsibility. Like all Domini funds, it also excludes businesses engaged in weapons and firearms, nuclear energy, natural gas, coal mining, tobacco, oil, alcohol and gambling.
Neuberger Berman also offers equity (stocks) and fixed income (bonds) funds that seek to generate ESG impact, alongside a financial return.
With minimal effort, you can also determine the degree to which your existing mutual fund investments or employer-provided 401(k) is invested in companies committed to gender diversity and equality by using the free search tool available through genderequality.org.
2. Buying individual shares
ESG and SRI funds make it easy to invest for impact, since the fund manager does the stock picking for you.
Mitchell Kraus, a financial professional with Capital Intelligence Associates in Santa Monica, California, who has been integrating ESG/SRI investments into his client’s portfolios for years, said average retail investors are generally well-served by sticking with funds. “I find that for most clients who wish to create a diversified portfolio, having ETFs and mutual funds works best,” he said in an interview, noting that each client is different.
If you’re willing to roll up your sleeves and have the skill set to research stocks on your own, you might instead consider buying a few individual shares in women-led businesses or companies that meet the female-friendly criteria.
An easy entrée is to look for companies that get recognized repeatedly for gender pay equality, women’s advancement in the executive ranks, flexible work schedules, and generous family leave policies. (Related: 3 rules for female small business leaders)
Newsweek’s “America’s Greatest Workplaces for Women 2025” list highlights companiesthat foster environments where women can thrive based on workforce diversity, compensation and benefits, work-life balance and career progression. Forbes magazine also produces an annual ranking of top employers for women.
Be aware that buying individual stocks is inherently more risky, especially if it upsets the balance in your diversified portfolio. Financial professionals caution against overexposure to any one company or sector — the financial equivalent of putting all your eggs in one basket.
Here again, a financial professional can help you create an asset mix that helps you achieve your goals while managing downside risk.
3. Venture capital funds
More sophisticated investors who aren’t afraid to finance unproven startups, might also consider venture capital funds that provide seed money to female entrepreneurs.
There’s no denying that the need is great.
According to the Founders Forum Group, just 2.3 percent ($6.7 billion) of the $289 billion invested globally in 2024 went to female-only founding teams, while 83.6 percent ($241.9 billion) went to all-male founded teams. Another 14.1 percent ($40.7 billion) went to mixed gender founding teams. That hasn’t stopped female visionaries from forging ahead.
A 2024 Wells Fargo impact study found that women own 39 percent (about 14 million) of all U.S. businesses, a nearly 14 percent increase since 2019. 4 Importantly, the number of firms owned by minority women has also grown by 24 percent between 2023 and 2019, it found..6
To encourage that growth, a select few venture capital funds are looking to improve access to capital.
For example, the Female Founders Fund provides early-stage funding in areas where women-led startups have historically had significant impact, including e-commerce, web-enabled products and services, marketplaces that connect buyers and sellers, and platforms (i.e. disruptive networks and communities connected via technology solutions.)
According to its website, the fund also seeks to create a network for female founders to share knowledge.
Goldman Sachs has also invested more than $1 billion into private- and late-stage, women-founded, women-owned, or women-led companies. The “Launch With GS” program will enable client investors to either invest in late-stage companies or provide seed capital for women, black, LatinX, and other diverse entrepreneurs. A key component of the program is networking, bringing together investors, entrepreneurs, non-profits, and other leaders (both men and women) to nurture and grow new businesses.
“We believe fostering a community will, over time, help increase the pipeline of investment opportunities in women-led businesses,” said Stephanie Cohen, Goldman Sachs’ chief strategy officer, in a statement. “We also hope it makes a difference for women who have big ideas, but find themselves cut out of the funding ecosystem.”
4. Donate or lend
If you’re not prepared to commit a portion of your portfolio to women-focused stocks, there are still plenty of ways to put your money to work.
Consider supporting a startup through a crowdfunding platform such as iFundWomen, which provides needed capital for female entrepreneurs using a pay-it-forward model.
You can also become a lender through microloan sites such as Grameen America, which help women in poverty worldwide to start their own businesses, generate an income, and get an education.
Or, you can donate to organizations like Accion or Elizabeth Street Ventures, both of which provide small business loans to women in underserved communities.
It’s never been easier to empower women in business.
As investors take steps to align their portfolios with their principles, and research reveals that ESG stocks can outperform relative to their peers, Arnold said he believes that the trend towards impact investing will continue to climb.
“It’s here to stay,” he said. “It’s no longer a niche investment strategy.”
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Frequently Asked Questions about investing in women-led businesses
Q: How does it help the economy to support women business owners?
A: Supporting women-owned businesses drives significant economic growth. In the U.S., women own more than 14.2 million businesses generating $2.8 trillion annually. Investing in these businesses creates jobs and fosters community development.
Q: How much venture capital funding goes to female founders?
A: Despite their massive economic impact, female founders receive less than 2 percent of all venture capital funding. This highlights a critical gap in women business support and presents a unique opportunity for impact investors to step in.
Q: What are the best ways to invest in women-owned businesses?
A: You can support women in business by investing in Environmental, Social, and Governance (ESG) mutual funds and exchange traded funds that prioritize gender diversity, buying shares in female-led companies, contributing to venture capital funds focused on women, or using micro-lending platforms.
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This article was originally published in April 2020. It has been updated.
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MassMutual is not endorsing or recommending an investment in any of the companies mentioned in this article. Investing involves risk including possible loss of principal.
1 Morningstar, “US Sustainable Funds Registered a Third Consecutive Year of Outflows in 2025,” March 24, 2026.
2 Morgan Stanley, “Sustainable Funds Beat Traditional Funds in First Half of 2025,” Sept. 8, 2025.
32Morningstar, “The 2022 U.S. Sustainable Funds Landscape in 5 Charts,” Feb. 17, 2023.
3PitchBook, “All In: Female Founders in the VC Ecosystem,” 2022.
5 Wells Fargo, “2024 Impact of Women-Owned Businesses.”
MassMutual is not endorsing or recommending an investment in any of the companies mentioned in this article.
1 Morningstar, “The 2022 U.S. Sustainable Funds Landscape in 5 Charts,” Feb. 17, 2023.
2PitchBook, “All In: Female Founders in the VC Ecosystem,” 2022.
3 Biz2Credit, “Profits of Women-Owned Businesses Jumped 27% in 2022: Biz2Credit Study,” March 8, 2023.
4 World Economic Forum, “Here’s what women’s entrepreneurship looks like around the world,” July 20, 2022.
