Many investors, including some professionals and advisors, look to invest with a moral compass. Issuers of exchange traded funds (ETFs) have been meeting that demand with an increasing number of exchange traded funds that address various issues.
Time will ultimately tell how successful these ETFs end up being, but investors do not need to wait to gauge the success of the SPDR Gender Diversity Index ETF (NYSEArca: SHE). SHE is not even two months old and is already home to nearly $270 million in assets under management, making it one of the most successful ETFs to launch this year.
SHE seeks to track the performance of the SSGA Gender Diversity Index, which comprises listed U.S. large capitalization companies with the highest levels within their sectors of gender diversity on their boards of directors and in their senior leadership.
According to a 2015 MSCI study that explored global trends in gender diversity on corporate boards between December 2009 and August 2015, companies with at least three female board members outperformed others in overall return on equity by more than 36 percent.
Arleen Jacobious for Pensions & Investments reports: “The number of women at top spots at companies hit a plateau in the 1990s, said Jennifer Bender, Boston-based director of research for global equity beta solutions, the passive equity arm of State Street Global Advisors.”
[related_stories]In the past two years, there have been significant developments in Environmental, Social and Governance (ESG) index-based investing. S&P Global Market Intelligence thinks that a more modest global economic expectation, a focus on climate changes and the gender pay-gap disparity and a new generation of investors comfortable with alternatively-weighted passive strategies plays a role.
Financial services and healthcare stocks combine for 34.5% of SHE’s lineup while technology and industrial names combine for another 28%. At nearly 13%, the consumer discretionary sector is the only other group to garner double-digit representation in SHE.
“When SSgA executives were creating the index, they wanted to focus on women across senior management levels. What they have found is that there is a lot of variation across sectors. The lack of women in top positions is most obvious in technology and energy. Consumer staples and consumer discretionary tend to have more women in senior positions,” adds Pensions & Investments.
