Insights

How Equity in Finance Could Massively Shift Capital for a Stronger Economy

In an interview from Motley Fool Live, recorded on July 13, Daryn Dodson, Managing Director of Illumen Capital, discusses some of the key barriers to equity that exist in the current investing space and how impact investing helps address and breaks down those barriers.

Daryn Dodson: When we look at issues of equity and the fact that most of the planet is women and people of color, and we look at the asset management business, which is 98.7% white men, we see a massive opportunity to invest in people that are clearly overlooked and underestimated within the leadership of the financial services industry and specifically the asset management business, to be able to drive this prosperity and optimality that we hope to see.

In fact, through our research with Stanford University, one of the things that we were able to look at is that we secretly tested 180 asset allocators that manage more than $4 trillion in capital. We tested them to see if they would rate high-performing Black-led funds and high-performing white-led funds with the exact same criteria except the face of the managing director, differently.

What we found is that, as we increase the performance of Black-led funds, the bias increased and less capital and less interest was paid toward high-performing Black-led managers. The higher they performed, the more bias they faced. What we find is that when we combine that research with the 1.3% of women and people of color in the asset management business, we have to ask the question, what’s going on, basically, [laughs] that these high-performing managers would be systematically and consistently overlooked as they outperform.

That could very well be part of the reason why they’re siloed into this very small percentage of the asset management business. If we work with managers, leaders, asset allocators to do the work to reduce their implicit biases that would diminish their clients’ returns and their own returns, there’s a possibility that there would be a massive shift in capital to where it should be optimally in the ecosystem to outperform and help the overall growth of the economy, the global economy, the U.S. economy, etc.

The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Rebate Rewards

Level 2 Rebate

Deposit $2,000 and get $200 Rebate
$ 200 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $2,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $200 Rebate
Popular

Level 1 Rebate

Deposit $1,000 and get $100 Rebate
$ 100 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $1,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $100 Rebate

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here To Get Started
EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here For More Info