Are you missing this element when assessing management?

Before investing in a company, you assess that company’s management — its philosophy, track record, effectiveness. But you might do well to consider another potentially critical factor: whether management includes female leadership.

That’s because female CEOs or chairs perform far better than the market, reveals research by Nordea, Scandinavia’s largest bank.

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Manager Robert Naess designed the study of almost 11,000 publicly traded companies globally, which found that the annualized return for female-led firms, based on an equal weighting, was 25% since 2009, compared with just 11% for the MSCI World Index, reports Bloomberg.

Naess tells Bloomberg that the results are possibly attributable to women being more conservative or to only the top female candidates breaking the glass ceiling.

Read: The rewards of de-Ubering your portfolio

Another potential reason cited by Naess and reported by the Washington Post is that women tend to lead less volatile companies.

Regardless of the reason, Naess tells the Post, “The simple interpretation of my calculations is to buy the companies with a female CEO [or] chair. If you invested consistently in only companies with a female CEO [or] chair, then you would have done better than the market.”

Read the full articles from Bloomberg and the Washington Post.

Also read:

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Big gap remains for female managers in finance: report

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