Lyxor is planning a cross-listing of the Lyxor Gender Equality ETF, Europe’s first ETF to focus on companies leading the field in gender equality, on London Stock Exchange.
The fund will trade in pounds sterling under the ticker HERS LN.
The fund was originally rolled out on Euronext Paris under the ticker ELLE FP in November 2017. While ELLE trades in euros, the London listing will trade in pounds sterling under the ticker HERS LN.
ELLE was developed in partnership with index provider Solactive and is backed by analytics powered by gender equality foundation Equileap. The ETF is linked to the Solactive Equileap Global Gender Equality Index, an index of 150 stocks based on Equileap’s global database covering more than 3,000 companies in 23 developed market countries. Each company has a market capitalisation of at least $2 billion and an average daily value traded of at least $5 million.
To refine the selection to just 150 companies, the index selects the highest ranked firms according to Equileap’s Gender Scorecard, a 19-criteria methodology inspired by the UN Women’s Empowerment Principles. Key criteria for selection are gender balance, equal compensation, work-life balance, policies promoting gender equality, transparency, and accountability. Index holdings are equally weighted and rebalanced annually.
Commenting at the time of the fund’s original launch, Diana van Maasdijk, CEO at Equileap, said: “Building our database and ranking over 3000 companies on 19 criteria was a first step towards transparency – you can’t change what you can’t see. Having investment vehicles tied to our indices is a second step towards change – a tool not only helping responsible investors, but also encouraging companies to make a difference.“
Timo Pfeiffer, head of research at Solactive, added, “Thanks to this gender lens methodology, investors can integrate gender balance into their portfolios, which is an increasingly important theme in finance and the business world.”
Almost half of the companies in the index are listed in the US, which currently has an index weight of 46.6%. Australia is the second largest country represented, accounting for 9.8% of the total weight, followed by the UK (9.4%) and France (8.4%). The largest sector exposures are financials (20.1%), consumer discretionary (12.9%), healthcare (10.1%) and information technology (9.5%).
The company topping Equileap’s Gender Scorecard is French cosmetics company L’Oreal, while other well-known firms on the constituent list include Sanofi, Diageo, Merck, GlaxoSmithKline, Adobe, Marks and Spencer, Novartis, Bank of America, and Nike.
Research suggests equality can be good for performance by promoting loyalty from customers, ensuring employees feel valued, and helping to attract new talent. Using back-tested data from 30 September 2011, the index has returned 10.5% per annum with an annualized standard deviation of 13.2%.
The fund has a total expense ratio (TER) of 0.35%.
The largest ETF in the US to offer a play on the gender equality theme is State Street Global Advisors’ SPDR SSGA Gender Diversity Index ETF (SHE US), which has accumulated over $300m in assets under management since its launch on International Women’s Day on 8 March 2016.
SHE tracks the SSGA Gender Diversity Index, which currently comprises 169 stocks from the largest 1,000 listed companies in the US, based on the number of women at the CEO, board or senior leadership levels. Its TER is 0.20%.