This kind of news makes me leap for joy… What a wonderful concept – Women Leadership Funds you can invest in – AND know that you are investing soundly!
WSJ: Call it the XX factor for investing.
It is an intriguing concept: investing in stocks of companies with female leadership. Backed by studies that say such companies perform better, fund companies are stepping in with investments that snub male-dominated companies, and bet on women.
Bank of America’s U.S. Trust unit and Morgan Stanley MS -1.32% Wealth Management last year each introduced customized portfolios that screen companies for investment potential based on a gender lens.
Research from multiple sources shows that companies with more women on their boards have stronger finances, says Eve Ellis of Matterhorn Group at Morgan Stanley, who co-manages its parity portfolio strategy. She cites data from Catalyst Inc., a nonprofit focused on increasing opportunities for women in business, that show that from 2004 to 2008, Fortune 500 firms with three or more female directors had an 84% better return on sales and a 46% better return on equity. Matterhorn Group cites studies by several universities and consulting companies as well that see a correlation between strong financials and women in leadership roles.
Barclays BARC.LN -0.92% PLC in July launched a Barclays Women in Leadership Total Return Index and related exchange-traded notes, Barclays Women in Leadership ETN.
“Everyone is talking about women in leadership,” says Barbara Byrne, vice chairman in investment banking at Barclays. The London bank has 80-plus ETNs, so the notes were the logical framework, and its research shows market demand, she says.