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How to Invest in ETFs Backed by Women Power

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On International Women’s Day, let us put the spotlight on the power of women in the world of business. Women have altered both the managerial and investing landscape in a big way over the past couple of decades.

Firms having more female employees as top brass tend to outperform the market. Given this, many investors are seeking to add female-centric companies to their portfolios, although the list is still small. While betting on an individual company is certainly a good option, investors can also play this space with lower risk and higher diversification benefits in a basket form (read: 5 Stocks That Powered Nasdaq ETF Last Week).

Currently, there are a few ETFs like SPDR SSGA Gender Diversity Index ETF (SHE - Free Report) , Impact Shares YWCA Women’s Empowerment ETF (WOMN - Free Report) and Hypatia Women CEO ETF (WCEO - Free Report) offering broad exposure to women-led companies.

A new report released by the House of Commons revealed that companies with a higher percentage of female leaders, outperform those dominated by men.

2023 sets a record year for women in leadership roles as more than 10% of Fortune 500 companies are led by women for the first time in 68-year history. Five new women CEOs of Fortune 500 companies began their roles as of Jan 1, 2023, which pushed the number to 53 CEOs, according to data from Fortune. As of the summer of 2022, about 8.8% of Fortune 500 companies are led by women (read: Rising Rate ETF Outperforms in February: Here's Why).

According to many researchers, companies with greater levels of gender diversity on their boards of directors were more profitable than their male-dominant counterparts. Gender diversity usually results in increased productivity, greater innovation, better decision-making as well as higher employee retention and satisfaction. Companies with greater diversity on their boards have also experienced lower volatility in earnings and dividends. All these suggest a new era of women leadership in world economy.

ETFs in Focus

SPDR SSGA Gender Diversity Index ETF (SHE - Free Report)

SPDR SSGA Gender Diversity Index ETF offers exposure to U.S. companies that lead their sector in demonstrating a commitment toward promoting and supporting gender diversity throughout all levels of the organization by tracking the MSCI USA Gender Diversity Select Index. It holds 259 stocks, with none accounting for more than 4.6% share. From a sector look, information technology, healthcare, financials and consumer discretionary receive double-digit exposure each.

SPDR SSGA Gender Diversity Index ETF has amassed $202.2 million in its asset base while trading in a light volume of about 8,000 shares. It charges 20 bps in annual fees (see: all the Large Cap Blend ETFs here).

Impact Shares YWCA Women’s Empowerment ETF (WOMN - Free Report)

Impact Shares YWCA Women’s Empowerment ETF has attracted $35 million in AUM and trades in volume of about 4,000 shares a day on average. It tracks the Morningstar Women’s Empowerment Index, which is designed to provide exposure to companies worldwide with strong policies and practices in support of women’s empowerment and gender equality.

Impact Shares YWCA Women’s Empowerment ETF holds 201 stocks in its portfolio, with none making up for more than 5.3% of assets. The product charges 75 bps in annual fees and has a Zacks ETF Rank #3 (Hold).

Hypatia Women CEO ETF (WCEO - Free Report)

Hypatia Women CEO ETF is an actively managed fund, which invests in all publicly traded American companies that have female Chief Executive Officers, from small cap to mega cap. It holds 132 stocks in its basket, with each accounting for no more than 2.3% of assets. Industrials, financials, information technology, consumer discretionary and healthcare receive double-digit allocation each.

Hypatia Women CEO ETF has accumulated $1.6 million in its asset base since its debut in January this year. It charges 85 bps in annual fees.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

SPDR MSCI USA Gender Diversity ETF (SHE) - free report >>

Impact Shares YWCA Women's Empowerment ETF (WOMN) - free report >>

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