Investing in Women-Led or Owned Companies

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Many investors buy stocks in companies that match their values, whether it be environmental, social or governance issues, minority-owned, women-owned or companies led by women.

For many, this is a smart investment decision. After all, in the United States, “women-owned firms are growing at more than double the rate of all other firms, contribute nearly $3 trillion to the economy and are directly responsible for 23 million jobs.”

As mentioned in Part 1, companies with a larger percentage of women managers tend to outperform those with male leaders. The research measured variables such as profit, corporate governance and creativity. For this reason, many investors seek out companies predominantly led by women, although the list is still small.

“We find that funds managed by women or mixed teams produce similar and sometimes better risk-adjusted returns than male-only managed funds but they are few in number, and find it difficult to raise significant amounts of assets,” concluded a British research study published in the Journal of Applied Finance & Banking.

If women-led or women-owned companies are important to you, the following investments should help give ideas of how to get started. These include stocks, exchange-traded funds and mutual funds that focus on women.

ETFs focused on women empowerment and equality

Let’s start by taking a look at ETFs who invest in companies with women CEOs or women in leadership positions. Although the one-year results below serve as a guide, don’t use past performance as the main reason for deciding whether a security will be profitable in the near term.

Note: The following securities, listed in random order, are not recommendations, but are ideas to motivate you to do additional research. The goal is to invest your money and earn profits with the issues and ideas that are important to you.

Note: Over the last year (as of August 29, 2024), the S&P 500 gained 25.22%.

1. SPDR SSGA Gender Diversity Index ETF

SHE tracks an index provided by MSCI that scores companies based on women representation in leadership as well as their diversity programs for staff.

One-year total return: +27.94% (as of August 29, 2024)
Assets Under Management (AUM): $247 million
Expense ratio: .20%
Top three holdings: Nvidia, Apple, Microsoft (MSFT)

2. Impact Shares YWCA Women’s Empowerment ETF
WOMN tracks an index provided by Morningstar that is designed to include companies with strong gender diversity programs. Additionally, all profits from this fund are donated to the YWCA.

One-year total return: +23.13% (as of August 29, 2024)
Assets Under Management (AUM): $59.4 million
Expense ratio: .75%
Top three holdings: Apple, Meta Platforms, Amazon

3. Hypatia Women CEO ETF
WCEO invests in all publicly traded American companies with female CEOs.

One-year total return: +19.62% (as of August 29, 2024)
Assets Under Management (AUM): $3.3 million
Expense ratio: .85%
Top three holdings: Lumen, Arista, Advanced Micro Devices

4. NYLI Engender Equality ETF
EQUL tracks an index provided by Solactive that is designed to include companies with gender equality, represented by equal pay and balanced leadership.

One-year total return: +20.30% (as of August 29, 2024)
Assets Under Management (AUM): $7.2 million
Expense ratio: .45%
Top three holdings: Kellanova, Globant SA, Halozyme Therapeutics

Mutual funds focused on women leadership

There are also a handful of mutual funds focused on women’s leadership, including the following.

1. Impax Ellevate Global Women’s Leadership Fund
PXWEX uses an in-house gender score to identify companies with diverse leadership, gender equity, and strong diversity programs and practices.

One-year total return: 18.23% (as of August 29, 2024)
Assets Under Management (AUM): $749 million
Expense ratio: .77%
Top three holdings: Nvidia, Microsoft, Apple

2. Fidelity Women’s Leadership Fund
FWOMX invests in companies with female representation in the senior management team or board of directors, or who have what the fund managers consider strong gender diversity practices.

One-year total return: +20.29% (as of August 29, 2024)
Assets Under Management (AUM): $154 million
Expense ratio: .69%
Top three holdings: Amazon, Microsoft, Nvidia

3. Fidelity Women’s Leadership ETF
FDWM follows the same methodology as the Fidelity Women’s Leadership Fund, but is instead available as an ETF.

One-year total return: +20.76% (as of August 29, 2024)
Assets Under Management (AUM): $3.9 million
Expense ratio: .59%
Top three holdings: Amazon, Microsoft, Nvidia

Women CEOs in Fortune 500 companies

The following is a partial list of women CEOs at Fortune 500 companies. As you see below, some of the largest companies in the world are led by women:

·       Karen Lynch, CVS Health CVS

·       Gail Boudreaux, Elevance Health ELV

·       Mary Barra, General Motors GM

·       Carol Tome, United Parcel Service UPS

·       Jane Fraser, Citigroup 

·       Corie Barry, Best Buy BBY

·       Tricia Griffith, Progressive PGR

·       Thasundra Duckett, TIAA

·       Safra Catz, Oracle ORCL

·       Lynn Good, Duke Energy DUK

·       Sarah London, Centene CNC

·       Priscilla Almodovar, Fannie Mae

·       Phebe Novakovic, General Dynamics GD

·       Kathy Warden, Northrop Grumman NOC

·       Vicki Hollub, Occidental Petroleum OXY

Six stocks in women-led companies

In addition to the stocks listed above, the following stocks were culled from a number of online sources. Once again, these stocks are not recommendations, but may be used as a starting point to do additional research.

Reminder: Over the last year (as of August 29, 2024), the S&P 500 gained 25.22%.

1. Arista Networks ANET
Stock price: $349 (as of August 29, 2024)
One-year total return: +87.49% (August 29, 2024)

2. Sunrun RUN
Stock price: 20.64 (as of August 29, 2024)
One-year total return: +47.46%

3. The Hershey Company HSY

Stock price: 191.16 (as of August 29, 2024)
One-year total return: -9.69% (August 29, 2024)

4. Zoetis ZTS
Stock price: $183.26 (as of August 29, 2024)
One-year total return: -1.28% (August 29, 2024)

5. Accenture ACN
Stock price: 342.51 (as of August 29, 2024)
One-year total return: +6.74% (August 29, 2024)

6. Veracyte VCT
Stock price: 32.39 (as of August 29, 2024)
One-year total return: +26.23% (August 29, 2024)

Conclusion

If women-led companies, diversity and gender diversity are important issues for you, there are many excellent investment choices, several which handily beat the S&P 500 over the last year. As always, just because a stock or investment performed well in the past does not mean it will continue to do so.

Never forget that it’s possible for a stock price, or the entire market, to fall. That is the risk that all investors take when participating in the stock market. Fortunately, several women-led companies, including some of the ones listed in this article, have outperformed the S&P 500, and will continue to do so, even if there is a market pullback.