Fund of Women-Run Firms Is Beating the S&P 500

The $199 million SPDR MSCI USA Gender Diversity Index ETF (SHE), which is the largest of such funds, has gained about 3% so far this year, compared with a 3.8% advance for the S&P 500.

Impact Shares’ $34.5 million YWCA Women’s Empowerment ETF (WOMN), designed to invest in companies with strong policies on gender equality, is up 4.3% year-to-date.

Even with better returns, Hypatia is still hoping to raise more capital for its ETF. Previous attempts at socially-targeted funds saw those products struggle without seed money from an endowment or other big institution.

“We are at $1.6 million in AUM, a tiny fraction of other funds,” Lizarraga said. “We will feel successful when business leaders and social influencers that care and talk about equality begin to invest their portfolios accordingly.”

Bank of America chart showing performance of female-led firms

The lack of funding can be remedied by meaningful outperformance, according to Bloomberg Intelligence.

Despite the bevy of research pointing to better performance for woman-led firms, these funds still have something to prove in order to garner assets. Top holdings in WCEO include Citigroup Inc. Progressive Corp. and Occidental Petroleum Corp.

“Even if there is academic research behind them, the one thing that can really help products like this survive and thrive is outperformance,” said James Seyffart, a BI analyst. “A product that has a good story behind it is a recipe for success.”

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