UBS introduces gender equality ETF

Jan 9th, 2018 | By | Category: Equities

UBS Asset Management has launched the UBS Global Gender Equality UCITS ETF (GENDER SW) on SIX Swiss Exchange, providing exposure to global companies perceived to be leading the field in terms of gender equality.

UBS introduces gender equality ETF

Michael Baldinger, Global Head of Sustainable and Impact Investing, UBS

The fund tracks the Solactive Equileap Global Gender Equality 100 Leaders Index, created by Frankfurt-based index provider Solactive and backed by analytics powered by gender equality foundation Equileap.

The index selects 100 companies from a universe of over 3,000 firms across 23 developed market countries.

The ETF follows swiftly on the heels of the Lyxor Gender Equality ETF (ELLE FP), Europe’s first ETF to focus on gender equality, which launched in November 2017. ELLE also tracks a Solactive index based on Equileap’s analytics but its underlying index is broader with 150 constituents.

To be included in the index, constituents must pass standard liquidity criteria as well as a basic ESG (Environment, Social and Governance) screen, which excludes companies deriving the majority of their revenues from the weapons, gambling or tobacco industries plus companies on the Norwegian Ethics Council List.

To refine the selection to just 100 companies, the index selects high-ranking firms according to Equileap’s Gender Scorecard, a 19-criteria methodology inspired by the UN Women’s Empowerment Principles. The scorecard is based on four categories: gender balance in leadership & workforce; equal compensation & work life balance; policies promoting gender equality; and commitment to transparency and accountability.

The methodology will always select a minimum of 30 US-listed stocks, choosing the firms with the highest Equileap score. Then the next highest scoring US stocks will be added, but only if they score above a certain Equileap score, up to maximum 50 US stocks in total. Lastly, the highest scoring companies from the rest of the world will be added to total 100 stocks in the composition.

The US-listed stocks will account for 50% of the entire index weight while the weights of all the other countries will be equally weighted to account for the other 50%. Constituents within each country grouping will be equally weighted. Reconstitution and rebalancing occurs annually.

Commenting on the launch, Michael Baldinger, head of sustainable and impact investing at UBS Asset Management, said, “The launch of this new ETF provides investors with a unique opportunity to benefit from systematically investing in the leading global companies on gender diversity, based on Equileap’s pioneering research into corporate gender diversity, while at the same time having the potential to achieve strong returns.”

Equileap CEO Diana van Maasdijk added: “We founded Equileap to give individuals and institutions the tools and information needed to invest, aiming for both a return and a more equitable world. We are encouraged by the growing interest in our high quality data and relevant insights into gender equality in the workplace and we have a few interesting developments ahead of us for 2018, starting with this ETF with UBS.”

GENDER has a total expense ratio (TER) of just 0.20%, significantly cheaper than SHE which was launched with a TER of 0.35%. UBS has also pledged to dedicate 5% of the ETF’s management fee (0.01% of total fund assets) to philanthropic projects supporting the UN’s Sustainable Development Goal.

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