An Index Fund That Invests in Strong Businesswomen

Moneybox
A blog about business and economics.
June 6 2014 10:05 AM

An Index Fund That Invests in Strong Businesswomen

Par7770431
Investing in more like her is something to smile about.

Photo by Eric Piermont/AFP/Getty Images

This story originally appeared on Inc

Plenty of business owners have lofty goals beyond just making money. Some want to generate green energy to combat climate change. Others want to fix health care by creating affordable options for consumers. Yet others have important social goals, like ending racial discrimination, or advancing women's issues.

Advertisement

In that last camp is Sallie Krawcheck, the Bank of America and Citigroup executive-turned-entrepreneur. In 2013 Krawcheck purchased the women's network 85 Broads, changing the name to Ellevate.

Now Krawcheck is launching an index fund, called the Pax Ellevate Global Women's Index Fund, which will invest in companies that have a strong commitment to women. It is, according to Krawcheck, the first fund to have responsibility toward women as its primary goal. (A spokeswoman for Pax said it has merged an older, much smaller index fund with similar objectives into the new fund.)*

In concept, the fund is not that different from others that have been around for decades, such as the Gabelli social index funds, which invest in socially responsible companies committed to diversity, the environment, or good corporate governance.

“Research indicates that companies with more women in senior management have higher returns on capital, lower volatility, greater client focus, increased innovation and greater long-term orientation," Krawcheck says on the website promoting the funds. "As a result, I believe they should also deliver better stockholder returns over time.”

Krawcheck will operate her fund through Pax World Investments, a socially responsible investment company. What's more, Ellevate will reportedly use a portion of membership fees from its network of high-profile, high-power women to invest in its own index.

Here's a description of the companies the fund will invest in, from its promotional materials:

  • Representation by women on the board of directors
  • Representation of women in executive management
  • Woman CFOs
  • Woman CEOs
  • Whether they are signatories to the Women's Empowerment Principles, a joint initiative of the UN Global Compact and UN Women.

With those criteria in mind, about 400 companies emerge as possible investment candidates for the index, the fund website says. (Among the signers to the Women's Empowerment Principles, and hence investment possibilities, are Alcoa, Microsoft, and Pepsico.)That's a pretty decent number of companies whose policies support women, and hopefully that number will grow as attention to the index fund, and women's issues in business and elsewhere, increases.

Update June 8, 2014: This story has been updated to clarify that Krawcheck's fund is the product of a merger with an older, smaller index fund with similar objectives to the newly launched venture.

Jeremy Quittner is a staff writer for Inc.

TODAY IN SLATE

Politics

The Irritating Confidante

John Dickerson on Ben Bradlee’s fascinating relationship with John F. Kennedy.

My Father Invented Social Networking at a Girls’ Reform School in the 1930s

Renée Zellweger’s New Face Is Too Real

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?

The All The President’s Men Scene That Captured Ben Bradlee

Medical Examiner

Is It Better to Be a Hero Like Batman?

Or an altruist like Bruce Wayne?

Technology

Driving in Circles

The autonomous Google car may never actually happen.

The World’s Human Rights Violators Are Signatories on the World’s Human Rights Treaties

How Punctual Are Germans?

  News & Politics
Politics
Oct. 22 2014 12:44 AM We Need More Ben Bradlees His relationship with John F. Kennedy shows what’s missing from today’s Washington journalism.
  Business
Moneybox
Oct. 21 2014 5:57 PM Soda and Fries Have Lost Their Charm for Both Consumers and Investors
  Life
The Vault
Oct. 21 2014 2:23 PM A Data-Packed Map of American Immigration in 1903
  Double X
The XX Factor
Oct. 21 2014 3:03 PM Renée Zellweger’s New Face Is Too Real
  Slate Plus
Behind the Scenes
Oct. 21 2014 1:02 PM Where Are Slate Plus Members From? This Weird Cartogram Explains. A weird-looking cartogram of Slate Plus memberships by state.
  Arts
Brow Beat
Oct. 21 2014 9:42 PM The All The President’s Men Scene That Perfectly Captured Ben Bradlee’s Genius
  Technology
Technology
Oct. 21 2014 11:44 PM Driving in Circles The autonomous Google car may never actually happen.
  Health & Science
Climate Desk
Oct. 21 2014 11:53 AM Taking Research for Granted Texas Republican Lamar Smith continues his crusade against independence in science.
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.