From Chile to Mauritius, Female Presidents Reward Stock Buyers

  • Stocks in female-led countries outperform male counterparts
  • All but one nation with woman leader beats S&P 500 return

Betting on female leaders has been a great move for stock pickers this year.

Equity markets in countries with a woman head of state have posted a median return of 25 percent in dollar terms, compared with 18 percent for nations run by men, according to data compiled by Bloomberg. Topping the list of female-led rallies is Chile’s 40 percent gain under President Michelle Bachelet. Next are the African island nation of Mauritius under Ameenah Gurib (32 percent) and Lithuania under Dalia Grybauskaite (30 percent).

Of course, there are any number of factors that contribute to bull markets, it’s tough to say how much of a role gender plays, and this year’s stock performance provides a very limited snapshot. But it’s interesting to note that stock indexes in all but one of the 14 female-led nations examined by Bloomberg have outperformed the S&P 500 Index’s 16 percent return in 2017. Past analysis has shown that companies with female executives or greater gender diversity have topped their competitors.

For female heads of state, economic and political performance tends to depend on whether they rose to power on the heels of a male sponsor or whether they did so independently, according to Alison Graham, the chief investment officer at Voltan Capital Management in New York. She cited Argentina’s Cristina Kirchner and Brazil’s Dilma Rousseff as examples of women who performed poorly after being anointed by popular male predecessors.

Some of the most effective female leaders assumed power in moments of stress. Margaret Thatcher emerged during a period of social crisis in the U.K. to lead "a profound economic transformation," according to Graham. Dalia Grybauskaite, known as Lithuania’s Iron Lady, won election in 2009 amid the financial crisis largely due to her economic acumen and tough stance against Russia. Bachelet, who is in her second term as president, has brought forth sweeping economic reforms and helped unite Chile during the trial and death of former dictator Augusto Pinochet.

“The economic outperformance probably results from a combination of factors: a forceful personality that can articulate and implement a clear economic program, combined with a context in which competence, clarity and personal mettle are most acutely needed,” Graham said. “The bar is set higher for independent female leaders, which might also contribute to their outperformance in office.”

— With assistance by Carlos Torres, and Daniela Guzman

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