This week, Sallie Krawcheck announced that 85 Broads, the professional women’s networking organization she bought in 2013, is rebranding with a new name and forming a new (exciting!) partnership. 85 Broads, now named Ellevate, aims to use their rich global network of 34,000 members to help women succeed.
To support this mission, Ellevate is partnering with Pax World Management to create the Pax Ellevate Global Women’s Index Fund (PXWEX) — an index fund that focuses on investing in companies with female leaders: women serving on their boards and in other senior management positions. The fund overview describes it best: “This Fund is the first of its kind – and is the only mutual fund in the United States that focuses on investing in the highest-rated companies in the world in advancing women's leadership.”
Krawcheck, who made the Forbes “World's 100 Most Powerful Women” and Fortune's “50 Most Powerful Women in Business” multiple times, spent over 20 years on Wall Street. She began her career as an equity analyst then went on to serve as CEO of Sanford C. Bernstein & Co., CEO of Citigroup's Smith Barney unit and CFO of Citigroup Inc. In 2009, Krawcheck was hired as the president of the global wealth & investment management division of Bank of America, where she oversaw 16,000 financial advisors.
Krawcheck left Wall Street in 2011 after Bank of America restructured the company and eliminated her position. In the year since she took the helm at 85 Broads, the network saw a reported 100 percent revenue growth. As Ellevate, the company plans on promoting networking and education for professional women, specifically by working with companies and investors. Seeing more women at the top doesn’t just achieve gender parity, says Krawcheck, but also yields greater corporate results.
I spoke with Sallie about the motivation behind creating this ground-breaking fund, its significance in disrupting our current financial landscape and the real impact that having women in senior positions has on companies. Find out why it’s more imperative now than ever to #InvestInWomen.
Listen to Amanda's interview with Sallie below or click "Next" beneath the recording to read a condensed version of the transcript.
Amanda Steinberg: What you’re doing right now is pivotal for women. Women are going to inherit about two-thirds of the nation’s wealth, which means women are going to decide how to invest that money, whether it’s within our 401(k)s or other types of investments. But the other thing that you and I both know, Sallie, is that money wasn’t always within women’s domain, especially when it came to investing. It was typically the husband’s job or something we delegated to financial planners.
What you’re doing with your fund is very special. Tell us about why you started the fund and what it means to invest in women?
Sallie Krawcheck: I’ve become a huge believer in the power of investing in women. Whether that is women investing in themselves, asking for a raise at work, gathering greater skills, etc. And when women invest in themselves and get to the tops of companies, great things, the research indicates, happen to those companies. Better corporate financial results are associated with greater diversity in leadership. As I look at the entire landscape of women investing in themselves, these are extraordinary positives.
The research suggests that we, women, tend to think about work differently than the gentlemen do. The gentlemen, when you ask them what they work for, the first answer is: money. Women, work for [a] meaningful purpose, and money too. So is the case with investment. We women are looking at what has historically been an either/or question: get a fair return or express [our] values? The answer is: “and.” I’d like to get a fair return and I’d like to express my values. And, hearing from women, all of you, is that one of the values you want to express is having more women in leadership positions.
It’s really wonderful seeing so many women become investors and put a different kind of pressure on the market and their return on investment. I keep using the term “fair return” because we took a step back and we crunched the numbers, looking for companies with the highest percentage of women in their boards and also of women in management teams. I laughed because I thought maybe these would be fringe companies that, you know, you’ve never really heard of before. It turns out, the companies that floated to the top, 400 companies, were the PepsiCo's, the GEs, the Avons and the Yahoos — real brand name companies.
The other thing that happens is when you have gender diversity at the senior levels, you have lower pay disparity throughout the company. So, with women in leadership positions, you get good quality companies with a fair return and do something that makes a difference.
What do you think is the ultimate possibility here that we’ve never seen before? There is a person to person impact. Women are under-invested. Within the Ellevate network, it’s 34,000 women around the world. Would you believe that the majority of those women tell us that their money is unmanaged? That their money is in the bank or they have an S&P 500 fund? Only 15 percent of them have a financial advisor.
On a person to person basis, [giving them this education,] that’s a good day’s work. On a more macro level, to continue for all of us to be able to invest is icing on the cake. It’s a privilege to be able to bring this capability out.
How do we invest in this fund? Do we go on E*TRADE? Do we invest through our 401(k)s at work? Where do you begin and how much money do you need? This is an accessible fund. The ticker for the fund, what you might tell your financial advisor or type into a Fidelity to find it, is PXWEX. The minimum investment is $1,000. An individual can check on those platforms or talk to their financial advisors, or go to our website paxellevate.com.
This transcript has been edited and condensed. Listen to the interview in its entirety here.
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