Investment strategy

Women's Equality Day: How One ETF Up Nearly 20% This Year Promotes Female Empowerment

Source: NYSE

It's only fitting that two top female empowerment ETFs are hitting all-time highs ahead of Women's Equality Day.

The Impact Shares YWCA Women's Empowerment ETF (WOMN) and the SPDR SSGA Gender Diversity Index ETF (SHE) both notched records in Wednesday's trading session ahead of the national holiday commemorating women's suffrage and equal rights.

WOMN is up nearly 19% so far this year while SHE is up 17%.

These types of thematic funds can help organizations such as the YWCA promote their causes in previously untapped ways, Tina Herrera, chair of the YWCA's board of directors, told CNBC's "ETF Edge" on Monday.

YWCA uses nearly 20 different filters to evaluate WOMN's holdings for their roles in empowering women and, in some cases, actively engages with the companies to try and improve their methodologies, Herrera said.

The ETF rebalances once a year, adjusting its portfolio based on any positive or negative developments that occurred during the prior 12 months.

"I hate to use the word 'guarantee,' but we certainly provide some assurance that ... the over 200 companies that are involved in the ETF are doing the right thing to empower women," Herrera said. "As we know, companies that have a focus this intently on their workforce tend to be very well run."

ETFs such as WOMN and SHE deserve more attention in the realm of environmental, social and governance investing, CFRA's Todd Rosenbluth said in the same interview.

"WOMN ... has actually outperformed the Russell 1000 in the past year," the firm's senior director of ETF and mutual fund research said.

WOMN tracks the Morningstar Women's Empowerment Index. Its constituents are similar to the Russell 1000's, but adjusted for gender balance in the workplace, equal compensation and work-life balance, favorable gender equality policies, and dedication to transparency and accountability.

WOMN's five largest holdings are Microsoft, Apple, Alphabet, Amazon and Nvidia. SHE's top five holdings are Disney, Visa, PayPal, and UnitedHealth Group.

"SHE ... has also outperformed," Rosenbluth said. "So, you cannot just feel good about what you're doing, but actually add value to your overall account by investing in some of these more narrowly focused ESG products."


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