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5 ways investors can support women in business

Shelly  Gigante

Posted on October 11, 2022

Shelly Gigante specializes in personal finance issues. Her work has appeared in a variety of publications and news websites.
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Highlight the myriad ways that environment, social, and governance policies can be good for business.

Provide insight into socially responsible investing and their higher historical returns.

Suggest strategies to invest in venture capital funds that provide seed funding to female entrepreneurs.

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.

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 suffered a slide in 2022, but has beaten the broader market longer term. .

Indeed, sustainable U.S. large-blend funds underperformed their conventional peers in 2022, but over the trailing three- or five-year period, an investor seeking long-term returns would have been better off in a sustainable fund than in one of its conventional peers, according to a report by Morningstar associate director Alyssa Stankiewicz.1

“Of the 451 U.S. large blend funds an investor could have chosen in January 2018, 169 survived and beat the Russell 1000 Index, while 282 either closed or underperformed,” she wrote in 2023. “Nearly 60 percent of the sustainable options succeeded, while only 35 percent of their conventional peers did.”

In each of the past three calendar years, Stankiewicz adds, sustainable funds produced a faster organic growth rate (net flows as a percentage of total assets) than their conventional peers. The SRI sector’s expansion was significantly more muted in 2022 than in previous years, a byproduct of Wall Street volatility, energy sector gains, and political pressure. Sustainable funds grew by 0.9 percent in 2022, while the overall U.S. fund universe contracted by 1.3 percent. (Learn more: Socially responsible investing)

ESG considerations are not just good for the planet, Morningstar found. They are 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.

Of course, investors should 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.
  • Pax 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

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)

Seramount online magazine produces a list of top 100 companies every year that offer inclusive benefits for families, including paid gender-neutral parental leave and reimbursement for fertility treatment., as does the National Association of Female Executives and Forbes magazine.

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 women entrepreneurs.

There’s no denying that the need is great.

According to financial data firm PitchBook, venture capital deal activity reached $3.6 billion in the third quarter of 2022 (on a year-over-year basis) for all-female founded companies, compared with $155 billion for all-male founded companies during the same time period.

That hasn’t stopped female visionaries from forging ahead.

The World Economic Forum found that women started 49 percent of new businesses in the U.S. in 2021, up from 28 percent in 2019.4

Importantly, the number of firms owned by minority women has also grown by nearly three times that of all women-owned firms over the past 11 years, according to the latest research by American Express.5

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 in 2018 also invested $500 million 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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This article was originally published in April 2020. It has been updated.



MassMutual is not endorsing or recommending an investment in any of the companies mentioned in this article.

Morningstar, “The 2022 U.S. Sustainable Funds Landscape in 5 Charts,” Feb. 17, 2023.

2PitchBook, “All In: Female Founders in the VC Ecosystem,” 2022.

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.

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