DEGIRO, Europe’s largest investment app, believes that investing isn’t just about money, it can make a better world. Through its platform, it highlights ESG scores so investors can make informed decisions and it releases educational content to help women get their start on the investment ladder. However, 4 in 5 investors are men and research shows that they are biased against female leaders even though female leaders tend to offer better returns. Today, just 7% of global CEOs are women. This isn’t just bad for society, it’s a poor investment strategy. DEGIRO recognised that their own platform had the ability to reverse this bias and, in doing so, boost their users’ returns while supporting women in business. While data blindspots and male investor reticence to change long-standing habits may have been stubborn obstacles to overcome, the potential to make a real difference made them hurdles worth clearing.

Pink Chip is a first-of-its-kind live index designed to make the success of female leadership impossible for investors to ignore by reframing a moral failure as a financial one. The index, initially for the US market, tracks the performance of female-led businesses and measures it against industry benchmarks and direct male competitors. For the first time, investors can see for themselves how investing in women is better for their bottom line and, through DEGIRO’s platform, choose to buy shares in women-led companies that caught their attention. The initiative, however, isn’t just for the benefit of investors. By promoting the power of female leadership, it contributes to the UN’s Sustainable Development Goal 5.5: Ensure women’s equal opportunities for leadership in political, economic and public life - because of this, UN Women NL joined as a launch partner to offer guidance during development and amplify Pink Chip’s message.

Pink Chip used AI and name recognition software to trawl through an extensive data-set of corporate structure filings and create a list of public companies with female leaders, a list that didn’t exist before. (please note that when we speak of “Female”, we are inclusive of all female-identifying people). This, however, was not the only criteria. Pink Chip companies must have a market capitalisation of over $2bn, a choice designed to constrain the universe of the index, and have demonstrated revenue growth of at least 8% over the last three years. This last criteria was chosen to insulate Pink Chip from the glass cliff effect, a phenomenon whereby women are more likely than men to be appointed to positions of leadership in companies experiencing consistently bad performance, where they are more likely to be “caretaker CEOs” than men.

Pink Chip used AI and name recognition software to trawl through an extensive data-set of corporate structure filings and create a list of women-led companies, a list that didn’t exist before. In addition to requiring a female leader (Pink Chip is inclusive of all female-identifying people), the index had criteria based on market capital and consistent revenue growth to rule out “caretaker CEOs” and the glass cliff effect. DEGIRO then enlisted Thematic, ​​an AI-powered investment research platform, to collect the back-end data on which Pink Chip is built and refresh the list of companies on a daily basis. The index, the companies featured, and the methodology used to create Pink Chip are all freely available on PinkChip.org. Pink Chip is also on DEGIRO’s app where investors can compare its success to other indices and choose to invest directly in women-led businesses.

Pinkchip.org attracted 70,000 visitors within its first week. Within three weeks, over 14,500 DEGIRO users invested in Pink Chip companies. In that time, those companies saw a 6.7% stock price increase while the index climbed 9.48%. Overall, Pink Chip has outperformed market benchmarks by over 80% and keeps climbing. It is championed by academics who now have an open data-set of female-led companies to use across their research. With UN Women NL and grassroots activists on-board, Pink Chip made over 58m online impressions, reached over 85m people, and was added to Bloomberg. With an advisory board established across five countries, other investment platforms are in discussions to host Pink Chip, while new indices are in development for additional markets. Better still, with its data included in a variety of academic studies, Pink Chip can impact the perception of female leaders beyond the business world.