Efforts to align gender equality with financial performance face challenges as most funds underperform against benchmarks, raising concerns about their efficacy as viable investments.

Investment in gender equality funds aiming to prioritise corporate commitments to fair pay, leadership diversity, and workplace inclusivity has proven lacklustre when measured against market benchmarks. Research reveals that the vast majority of these funds have underperformed over the past three years, with only a small fraction demonstrating strong returns, highlighting a broader disconnect between social values and financial gains. Factors such as voluntary corporate data reporting, sector-specific constraints, and regional market factors complicate the efficiency of these funds as reliable investment vehicles. Some strategies emphasize metrics, like women in leadership roles, while others take a broader approach involving policies around transparency or inclusive working conditions. Critics argue these measurements don’t always equate to better long-term performance. For instance, the UBS Gender Equality ETF has significantly lagged behind global indices since its inception, contradicting earlier optimistic claims that gender diversity would inherently drive profitability. On the upside, funds closely aligned to high-performing indices, like SHE's parallel performance with the S&P 500, suggest that traditional market forces still dominate outcomes. The rising fees on such gender-based products also diminish potential profitability, fueling concern from analysts who suggest lower-cost index funds as an alternative. While some dismiss the challenges of these funds as tied to cultural opposition or “anti-woke” sentiment, others point out that recent market concentration in sectors like technology skews financial results regardless of their focus on equality. Advocates note that these investments still play a symbolic role in rewarding organisations for gender advancements but caution investors to align expectations with the realities of market performance or consider more direct ways to benefit women’s initiatives.