Face to face with Andy Dunn, product specialist, Baillie Gifford Japanese
Meeting summary This was a one-to-one, in-person update with Andy Dunn, who talked through Baillie...
The most recent study from the Institute for Fiscal Studies found that the UK gender gap is largely unaffected by government policies. The study compared people’s earnings for a 25-year period up to 2019. On average, in 2019, working-age women in the UK earned 40% less than men a week, with eight fewer hours of paid work and 19% less pay per hour*. While the report says minimum wage increases had helped close the gap for lower earners, there was no similar progress for graduates.
“Far too many women are hesitant and remain trapped in jobs for which they are over-qualified or paid beneath their worth.” — Janet Street-Porter, journalist & broadcaster
The gender pay gap is not a new issue and, in recent years, awareness has grown so much that various ‘equal pay days’ have been established to bring attention to the gap. Equal pay day in the UK was on 18 November this year because, on average, it marks the day in the year when women effectively stop earning relative to men. Yes, I have now effectively been working for free for 19 days. Thank goodness I’ve booked the next two weeks off for a vacation or I’d be working another 21 days for love rather than money…
Why does the gender pay gap continue to persist?
One reason for the gap is traditional gender norms often funnel women into lower-paying roles and discourage them from higher-paying jobs. Women are also often expected to handle unpaid caregiving for family members. That can cut into their work hours or stretch them too thin making them less willing, or able, to take on more responsibly at work or apply for a promotion.
Annoyingly, the pandemic has only served to increase the gap. Not only have women been more likely than men to lose their job or be put on furlough during the pandemic, but research shows that they have also been taking on a bigger share of childcare and household duties in lockdown. It has had a disproportionate impact, in particular, on women of colour, disabled women and mothers.
The gender pay gap holds women back from building long term wealth and financial independence. Experts have predicted that the pandemic – and subsequent economic fallout – could delay the closing of the gender pay gap by as much as 30 years. Not only this but missed pension payments could also leave women substantially worse off in retirement too.
But while we wait for governments and employers to make changes to close the gap, there are ways you can help yourself.
First, we can start by asking for a pay rise. A study a couple of years ago found that men are much more confident doing this than women and I doubt that has changed over the past 24 months. Yes, companies have been struggling, but wages are going up in some areas. So, if salaries are increasing in your area of the workforce, make sure yours is too.
Secondly, we can invest earlier, invest more (if we can) and take on more investment risk. Yes, we may have less money to start with, but women tend to be better at budgeting and finding that spare bit of cash. And, if you put this cash into a pension, it’s likely your employer will increase their contribution too. That’s ‘free’ bonus right there.
For those needing that extra push, here are three funds and trusts to consider:
Baillie Gifford Shin Nippon
This trust invests in smaller companies listed on the Japanese stock market. Shin Nippon means ‘new Japan’ and this trust focuses on emerging or disrupted sectors. Baillie Gifford has an excellent in-house research team and (in normal times) the team frequently travels to Japan themselves.
Learn more about this trust by subscribing to the Investing on the go podcast as we interview manager Praveen Kumar next week.
IFSL Marlborough UK Micro-Cap Growth
A little closer to home, the IFSL Marlborough UK Micro-Cap Growth fund invests in the UK’s smallest companies. This is one of the largest and most successful funds in the IA UK Smaller Companies sector but overall is a bit more risky than other UK small cap peers due to its focus on micro-caps.
Schroder British Opportunities
One of the few products to be launched in response to the pandemic, and a new Rating from FundCalibre, this trust seeks to tap into the unloved status of UK equities by targeting companies which have been in the eye of the storm. Importantly, the trust can also invest a small part into private equity companies which increases the level of risk for investors.
*Source: The Guardian, 6 December 2021