Is it an idea with promise or corporate pandering?
The Wall Street Journal’s resident egghead Jason Zweig once said ETFs “are so overspecialized, they make a pediatric endocrinologist seem like a family doctor who makes house calls.”
Case in point—State Street Global Advisors’ new Gender Diversity Index ETF (Ticker: SHE), which began trading last week.
The asset management giant says its latest offering helps “investors seek a return on gender diversity” and invest “in an index of companies with higher levels of gender diversity in senior leadership.”
We get the rise of impact investing and other “socially aware” strategies among the younger set, but it would seem gender diversity is feel-good marketing that’s difficult to monetize. Or is it?
Laura Liswood, writing in Harvard Business Review, cites EY research of 20,000 teams that found more gender diverse teams had higher profitability and greater client satisfaction than non-diverse teams.
“Yet when it comes to one of the most important ‘teams’ a company has—its board of directors—the United States seems to have hit a ceiling of about 16% women, with little by way of national efforts by government or business to increase that number,” she notes, before pointing to (of course) Norway, which has a mandatory quota system of 40 percent and better overall board performance.
So it would seem the product makes sense, and an increase in female representation at the senior level is something on which SSGA is banking.
“SHE seeks to help address gender inequality in corporate America by offering investors an opportunity to create change with capital and seek a return on gender diversity,” Kristi Mitchem, executive vice president and head of the Americas Institutional Client Group for SSGA, said in a statement. “This fund empowers investors to encourage more gender diverse leadership and support better long-term social and economic outcomes in support of gender diversity.”
To help strengthen third-party charitable organizations committed to enhancing gender diversity, SSGA says it will will direct a portion of its revenue to nonprofit organizations that help develop girls as leaders in business and science.
“Closing the gender gap requires strengthening gender diversity and inclusion practices across corporate America,” Alison Quirk, chief global human resources and corporate citizenship officer at State Street, added. “We want to empower girls to take their place in business leadership, especially in science, technology, engineering and math (STEM) industries that will be in high demand for the next 10 to 20 years. By paying it forward through the charitable contribution, we can build a better future.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
Now the transgender feels left out. Can we get an ETF with the symbol IT?