On International Women’s Day, let us see how women have altered both the managerial and investing landscape in a big way over the past couple of decades.

Research has consistently shown that companies with a higher percentage of female leaders often outperform those that are predominantly male-led. The performance is measured in terms of various metrics, including profitability, creativity and corporate governance. 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. Currently, there are a few ETFs like SPDR SSGA Gender Diversity Index ETF (SHE Quick QuoteSHE - Free Report) , Impact Shares YWCA Women’s Empowerment ETF (WOMN Quick QuoteWOMN - Free Report) , Hypatia Women CEO ETF (WCEO Quick QuoteWCEO - Free Report) and IQ Engender Equality ETF (EQUL Quick QuoteEQUL - Free Report) offering broad exposure to women-led companies.

Here are some key points that highlight the role of women in the corporate world and how it relates to a company’s performance:

Diversity: Diverse leadership teams tend to make more informed, creative and innovative decisions because they bring a variety of perspectives and experiences to the table. Women, bringing different life experiences and viewpoints, contribute significantly to this diversity (read: Is it the Right Time to Invest in Growth ETFs?).

Risk Management: Studies suggest that companies with more women in leadership roles have better risk management capabilities. Women's leadership styles can often be more cautious and inclusive, leading to more thorough risk assessment and management strategies.

Corporate Governance: Companies with female leaders often exhibit stronger corporate governance and ethical standards. The presence of women in high positions has been associated with more responsible governance, transparency and accountability.

Market Insight: Women control a large portion of consumer spending and, therefore, can offer invaluable insights into market trends, customer needs and product development. Companies with female leaders are often more attuned to the demands of the market.

Financial Performance: Numerous studies, including those by McKinsey & Company, Credit Suisse and Peterson Institute for International Economics, have found a correlation between higher levels of female leadership and financial performance indicators, such as higher returns on equity, improved profitability and better stock performance. This correlation suggests that gender-diverse leadership teams may be more effective in driving company growth and shareholder value (read: 5 Top-Ranked ETFs at New Highs Set to Soar Further).

Employee Satisfaction and Retention: Companies with more inclusive leadership practices, including gender diversity at the top, tend to have higher job satisfaction rates among employees and lower turnover rates. This can lead to higher productivity and lower recruitment and training costs.

ETFs in Focus

SPDR SSGA Gender Diversity Index ETF (SHE Quick QuoteSHE - 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 213 stocks, with none accounting for more than 5.4% share. From a sector look, information technology, financials, healthcare and consumer discretionary receive double-digit exposure each.

SPDR SSGA Gender Diversity Index ETF has amassed $228.1 million in its asset base while trading in a light volume of about 5,000 shares. It charges 20 bps in annual fees and has a Zacks ETF Rank #3 (Hold) (see: all the Large Cap Blend ETFs here).

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

Impact Shares YWCA Women’s Empowerment ETF has attracted $52.9 million in AUM and trades in about 5,000 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 204 stocks in its portfolio, with none making up for more than 5.4% of the assets. The product charges 75 bps in annual fees and has a Zacks ETF Rank #3.

Hypatia Women CEO ETF (WCEO Quick QuoteWCEO - Free Report)

Hypatia Women CEO ETF is an actively managed fund that invests in all publicly traded American companies that have female chief executive officers, from small-caps to mega-caps. It holds 130 stocks in its basket, with each accounting for no more than 1.3% of assets. Industrials, financials, consumer discretionary, information technology and healthcare receive double-digit allocation each.

Hypatia Women CEO ETF has accumulated $3.1 million in its asset base and charges 85 bps in annual fees.

IQ Engender Equality ETF (EQUL Quick QuoteEQUL - Free Report)

IQ Engender Equality ETF tracks the Solactive Equileap U.S. Gender Equality Index, which is designed to deliver exposure to global companies that promote gender equality and are committed to women’s empowerment through equal compensation and gender balance in leadership and the workforce. It holds 75 stocks in its basket, with none accounting for more than 2% share.

IQ Engender Equality ETF has accumulated $6.9 million in its asset base and charges 45 bps in annual fees. It trades in an average daily volume of under 500 shares.

Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.