Women have set new standards in the world economy through their incredible leadership, entrepreneurship, talent and decision-making skill. They are contributing to the global economy and are stimulating growth.
Women are likely to be a new emerging market over the next decade. This is especially true as the impact of women as producers, entrepreneurs, employees and consumers on the global economy will be as significant as that of China and India. In fact, income of women have been on the rise and will likely grow by $5 trillion to $18 trillion over the five years. This increase is almost twice the GDP growth projected for China and India combined, for the same period.
Further, by 2028, women are expected to account for about three-fourth of global spending, which is the most important driver of economic growth.
In the business world, women own about one-third of business and 50% of them operate well-known large companies. The number of women CEOs is rising, and is now 24 in the Fortune 500 and 27 in Fortune 1000 proving that they are more effective leaders than men. In fact, the companies run by women are doing better than many others led by men. A new study by Quantopian, a Boston-based trading platform, has revealed that the companies with female CEOs in the Fortune 1000 generate three times the returns from the S&P 500 over the past 12 years.
Another data from Bespoke Investment Group shows that women-run companies in the S&P 500 outpaced the broad market with average returns of 19.5% over the past year versus 14.9% gains for the companies in the same list with male CEOs. All these suggest a new era of women leadership in world economy.
Given this, investing in women-run companies might be a smart move and an ideal choice for investors seeking higher returns. While playing with an individual company is certainly an option, the Barclays (LONDON:BARC) Women in Leadership ETN (ARCA:WIL) could be a nice way to tap the space in a basket form with lesser risk (read: Invest in Women-Run Companies with This New ETF).
WIL in Focus
The product targets firms that have elevated women to leadership roles by tracking the Women in Leadership Index. The benchmark provides exposure to U.S. companies that have either female CEOs or at least 25% female members on the board of directors.
Currently, the index holds about 83 stocks with a definite focus on large cap companies. The top five holdings include PepsiCo (NYSE:PEP), Procter & Gamble (NYSE:PG), Wells Fargo (NYSE:WFC), International Business Machines (NYSE:IBM) and Oracle (NYSE:ORCL), all of which account for 5% of the total assets.
Further, the portfolio is well spread out across sectors with none accounting for more than 20% share. Information technology and consumer staples take the top two spots at 19.5% and 18.2%, respectively, while financials and telecom round off the top four with double-digit exposure each.
Since this is a new ETN which debuted last July, AUM and volume is sparse. The note has amassed $27.9 million in its asset base since and trades in paltry volume of under 1,000 shares. Expense ratio came in at 0.45%, steeper than many other U.S. focused or broad market funds. The product has added 9.3% so far in the year, easily crushing the gain of 2.7% for the broad market fund (ARCA:SPY) that tracks the S&P 500 index.
However, investors should note that WIL is an ETN, and has no tracking error though it does have credit risk from the issuing bank, Barclays Bank.