According to a SSGA, the firm was inspired to develop the Index by the California State Teachers’ Retirement System’s (CalSTRS) efforts to move the needle on gender diversity in corporate America, especially for women in leadership positions. CalSTRS has been a significant investor in SHE and provides the new ETF with liquidity. The ETF has a 0.20% expense ratio.
SHE’s top-10 holdings include Home Depot (HD), Berkshire Hathaway (BRK.B) and Oracle (ORCL).
Meanwhile, mutual fund investors focused on women’s leadership have a strong choice with Pax Ellevate Global Women’s Index Fund (PXWEX).
Unlike SHE, PXWEX is a global multi-cap core fund. Holdings include Carrefour (CA), Estee Lauder (EL) and Yahoo! (YHOO); PXWEX’s S&P Global Market Intelligence’s mutual fund ranking is aided by its attractively valued holdings. PXWEX has outperformed its Lipper peer group on a three-year annualized basis (8.9% vs. 6.7%).
Alternative Funds Remain Out of Favor
While the mutual fund industry gathered $24.1 billion of fresh money in the first three months of the year (excluding money markets), according to Lipper data, led by $27.1 billion from taxable and tax-free bond mutual funds, alternatives had $15.8 billion of outflows.
S&P Global Market Intelligence thinks in prior years the appeal for alternative mutual funds was that they are less correlated with traditional equity and fixed income funds that buy individual securities in hopes of capital appreciation and income generation. After the great recession, investors sought out alternative strategies focused on analysis of interest-rate trends or that sold short stocks or bonds in hopes that these would perform better when the market sold off.
However, the appeal appears to be dissipating, as 18 of the 20 largest alternative mutual funds had outflows in March, even as they employ different strategies.
Alternative global macro funds had $9.9 billion in net client withdrawals in the first quarter of 2016, hurt by $3.8 billion in March alone.
PIMCO All Asset Fund (PASAX), the second-largest alternatives portfolio and largest global macro fund with $19 billion in assets under management, saw its asset base shrink by $980 million in March 2016, bringing the asset decline to $2.3 billion for the first quarter of 2016. PASAX’s 9.3% decline in 2015 was even worse than its peers, though its 5.2% first quarter gain was stronger than the 0.76% for its brethren.
Ivy Asset Strategy (WASCX), a $10 billion portfolio, saw a larger $1.5 billion outflow in March, pushing its first quarter shrinkage to $4.2 billion. WASCX, which is managed by Waddell & Reade, had a wider 2015 loss than its peers, with a 9.05% decline. The fund declined an additional 5.29% in the first quarter of 2016.
Another investment style out of favor in 2016 was alternatives credit focus. The Lipper peer group had $8.7 billion in outflows in the first quarter, with $2.4 billion.
Goldman Sachs Strategic Income Fund (GSZAX), a $13.7 billion-asset portfolio, had $8.4 billion of outflows in 2015. The fund declined 1.66% in the first quarter of 2016, which we think caused ongoing concern among investors. Withdrawals of $835 million in March alone continued the shareholder trend.
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