Forrest-backed all-female fund wants to change a pale, male industry

Future Generation Women will charge no management and performance fees, will invest with a gender lens (considering issues such as gender-diverse leadership, equitable pay, and policies that support work-life balance) and will donate 1 per cent of its assets annually to causes that advance economic equality and security for women and their children.

Allfrey has long admired the Future Generation concept, and particularly the work it has done for mental health issues in young people, having had direct experience in her family with these challenges.

She’s excited about the chance to help drive change for women in what remains a male-dominated industry, despite improved diversity among fund managers and brokers, and particularly strong leadership on gender issues from the industry super fund sector.

“It’s gotten better, but I don’t think at the top it’s changed that much,” she says. “There’s still so many white, Anglo-Saxon male teams, which just drives me nuts. I would just like to see more change, so anything that can shine a spotlight on women in the industry is positive.”

The statistics show only 19 per cent of portfolio managers in Australia are women and 67 per cent of all industry promotions go to men, despite research suggesting female fundies often outperform their male counterparts and run strategies that tend to be more diversified and more risk conscious.

Allfrey says that in her experience, female managers tend to bring more balance to the investment process – a willingness to hear more perspectives, and the patience to try and get to the bottom of the story in conversations with management. Where women really shine, she says, is in a team environment, where diversity of views is especially important, regardless of the backgrounds of those involved. (Allfrey worked on an all-women team once that she describes as a disaster.)

Allfrey will be joined by a roster of the country’s top female fund managers, who will provide their services for free.

On the Australian equities side, Allfrey will be joined by Airlie Funds Management’s Emma Fisher, Yarra Capital Management’s Katie Hudson, Tribeca’s Jun Bei Liu, Paradice Investment’s Julia Weng and First Sentier Investors’ Dawn Kanelleas. Picking global stocks will be Magellan’s Nikki Thomas, Northcape Capital’s Fleur Wright, Munro’s Qiao Ma, Minotaur’s Armina Rosenberg, Antipodes Partners’ Vihari Ross and Plato Investment Management’s Chanel Stuart-Findlay.

Prominent company director Elana Rubin will head up an all-female advisory committee, while Future Generation chief executive Caroline Gurney will oversee the whole show.

Allfrey always tries to chat with women who approach her with an interest in entering the world of funds management and usually offers them two pieces of advice.

First, it is always good to try running your own portfolio, even if it’s just through an online broking account; everyone makes mistakes, and Allfrey says nothing helps you learn more than “hurt money”.

Secondly, keep learning. “If you’re not learning in your career, right, then you’re not going anywhere and it’s time to move on.”

So what have markets this year taught Allfrey? Basically, it’s getting harder for stock pickers like her.

This time last year, Allfrey says, many in the market were hoping for the return of animal spirits, IPOs and a dash of FOMO. Now, we’re getting that in spades: markets are resetting all-time highs every other day, Donald Trump’s pro-growth agenda has investors swooning and there’s even a big-ticket IPO in HMC Capital’s DigiCo Infrastructure REIT.

But life is tough for active managers, as a combination of passive and programmatic trading crowds out humble stock pickers.

“It’s sad. We, as an Australian market, are becoming like the US, where active investors are being pushed to the sidelines, and it’s all about machines.”

Computerised trading feeds on momentum from positive earnings upgrades and big stock movements, Allfrey says, which means companies that have any sort of stumble – a negative earnings downgrade or a delay in a project, however temporary – are shunned.

She gives biotech powerhouse (and WaveStone holding) CSL as an example: in a market up 20 per cent in the last 12 months, CSL is up 8 per cent, even though Allfrey sees better earnings and a potential share buyback in the second half of calendar 2025.

On the flipside, WaveStone holding Sigma Healthcare has been on a tear because of the momentum behind the stock.

Allfrey also says there’s been a notable shift towards passive investing. While the trend of big industry superannuation funds using ETFs has become more prominent, Allfrey says financial advisers are also steering clients towards index funds in a way they previously did not. It means the biggest stocks in the ASX continue to attract the weight of money – and small caps are still struggling to win support, two years into a bull market.

“We would have thought at this point in the cycle that they would be starting to outperform, but they still haven’t got off the canvas,” she says.

Allfrey sees value in defensive stocks, but it’s hard for active managers to fight the momentum that winners enjoy.

“We’ve got to change. We’ve got to get smarter.”

Read the full article in the Australian Financial Review here: Nicola Forrest backs Australia’s first all-female investment fund, Future Generation Women