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First ETF that Invests in Women Companies

First ETF that invests in women companies, ETF, ETFs

First ETF that invests in women companies, ETF, ETFsThe ticker with which to find it on the market, it is no coincidence, is "SHE". The SSGA Gender Diversity Index is an ETF launched about a year and a half ago in the United States by State Street, one of the greatest operators in the sector with its $ 2.5 trillion in assets under management. The peculiarity is that it is the first "clone" to invest explicitly in women companies, that they "express gender diversity in their leadership positions," as the prospectus explains.

The stock market debut took place on March 8, 2016, the same day that State Street Global Advisors placed, in front of the famous "bull" the bronze sculpture of Wall Street, the statue of the "fearless girl", a work by Italian Di Modica.

Why an Etf that invests in companies led by women? It is not just to be "politically correct", but also to earn. As Msci Research has revealed, companies with a strong female presence generate average stock market returns of 10.1% a year, compared to 7.4% of companies led by men. For "strong female presence" Msci intends at least three women in the Board or a woman in the Board and one as CEO: common features of 20% of US companies.

"We can not establish a causal link to explain over-performance – explains Msci's study – but we have found that societies where gender diversity does not exist, on average the Board suffer from more governance-related controversy",

The Etf SSGA Gender Diversity Index defines the percentage of "gender diversity" of one thousand major US companies and invests accordingly. "We're trying to identify all the big companies that have a strong presence of female executives," explains Jenn Bender, Global Street Research Advisors Global Equity Beta Solutions. The fact that it was launched by the Boston financial giant is not a case: 47% of State Street employees are female, as do 22% of executives.

While that fund’s assets have grown to about $354 million since its introduction in March 2016, the performance has trailed the S&P 500 by about 7 percentage points during the same period, as shown in the chart below (source Bloomberg).

First ETF that invests in women companies, ETF, ETFs

 

But you have to give it some time, a year and a half are too short a time to judge. There are 169 different companies in its portfolio: the most representative ones are Pfizer (5.96% of total), Coca-Cola (5.34%), Pepsi (4.43%), Amgen (3.83% and IBM (3.81%).

The SSGA Gender Diversity Index is the first Etf for women, but not the first financial product in the history "in pink": in 1993, a similar mutual fund was launched in the US, the Pax World Global Women's Equality Fund.

 

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