Legal & General Investment Management's Dame Helena Morrissey is to spearhead a strategy screening for positive gender diversity criteria.
The Future World Gender in Leadership UK Index fund, or the GIRL fund, will only invest in companies with a minimum of 30% of women employees at board, executive, management and workforce levels.
It will further rank index companies according to how they perform on these metrics.
Morrissey, head of personal investing at LGIM and former chief executive of Newton, has for many years been one of the City's leading supporters of gender equality.
She is a founder member of the 30% Club, the pressure group campaigning for one in three board positions in the UK to be occupied by women.
Morrissey said: ‘Gender inequality is one of the key issues of our time – and one that generates so much frustration. When we invest in the success of women, we are investing in the success of business.’
The strategy will also consider gender pay data which for the first time this year has become sujected to regulated disclosure by businesses which employ more than 250 people in the UK.
It will track an index of roughly 350 UK-listed companies.
LGIM’s North America head of corporate governance Clare Payn said increased gender diversity is needed for companies to 'remain relevant'.
'LGIM has been active in the diversity debate since 2011, and has been voting against all male boards since 2015' she added. 'Boards made up of just men, from the same socioeconomic backgrounds, cannot be the best forum for challenging debates.'
Just one in five of its top decile earners is female however, placing it in the middle of the sector for women in positions of seniority.