UBS Group AG recently launched an ETF that seek to invest in companies taking care of equality rights for lesbian, gay, bisexual and transgender employees in the workplace. The name of the fund is InsightShares LGBT Employment Equality ETF PRID. Let’s delve a little deeper.
Inside PRID
The fund looks to track the UBS LGBT Employment Equality Index, which follows “the price movements of U.S. companies that provide LGBT equality through their company and employment policies as measured by their score in the Human Rights Campaign Foundation's Corporate Equality Index.”
The index will be rated on the extent to which a company provides equal benefits to LGBT workers and their families and the measures it takes to promote LGBT inclusion competency and if it a has a public commitment to the LGBT community. Plus, the underlying index also checks if the companies have positive operating income over the prior 12 months.
The fund holds about 271 stocks in total with none accounting for more than 5.11% of the fund. Apple (NASDAQ:AAPL) (5.11%), Alphabet (NASDAQ:GOOGL) (3.84%) and Microsoft (NASDAQ:MSFT) (3.84%) are the top three stocks. The fund focuses on large-cap stocks. Growth stocks account for about 57% of the portfolio followed by value (30%) and blend (14%) stocks (read: Best Dividend Growth ETFs for Rising Rates).
As far as sector exposure is concerned, Technology (28%) gets the top priority. Financials (15%), Consumer Discretionary (15%) and Health Care (13%) are the top the sectors of the fund. It charges 65 bps in fees (read: What Rising Rates? Play These Cyclical ETFs).
How Does It Fit in a Portfolio?
This is a socially responsible ETF option. The portfolio is a timely new offering as U.S. President Trump expressed support to LGBT equality in a letter recently disclosed by Log Cabin Republicans. Initially, Trump was known for anti-LGBT policies. The letter, dated Dec 21 congratulated the LGBT Republican group on its 40th anniversary and acknowledged that the United States is thriving on the beliefs of equality, explicitly mentioning sexual orientation.
Plus,the Democratic Party is also focused on promoting the rights and “will continue to fight these efforts to erode the rights of LGBTQ people and work to expand their freedom to work, live, and love,” as per the director of LGBTQ media for the Democratic National Committee.
Competition
There is yet another fund with almost the same concept, namelyWorkplace Equality Portfolio EQLT. The fund follows Workplace Equality Index, which is a stock index including leading equality-minded U.S. publicly traded companies that support lesbian, gay bisexual and transgender (LGBT) equality in workplace.
The 247-stock fund charges 75 bps in fees and no stock accounts for more than 0.49% of the fund. It is heavy on Financials (22.02%) followed by the consumer discretionary sector (21.56%) and Information Technology (15.75%). The fund has about 79.5% focus on large-cap stocks.
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WORKPL-EQLT PRT (EQLT): ETF Research Reports
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Zacks Investment Research