Head of personal investing Helena Morrissey, who is also a diversity campaigner, announced the launch at a press conference on Thursday morning, stating gender inequality was an issue that generated a lot of frustration.
“Rather than feeling trapped or despondent, let’s do something about it,” Morrissey said.
Lyxor and UBS have both launched gender equality ETFs, which track Solactive Equileap Gender Equality indices. However, LGIM said the Future World Gender in Leadership UK Index fund will be the first gender equality passive to focus on UK companies.
The Solactive L&G Gender in Leadership UK Index it tracks is based on an in-house gender diversity screen from LGIM. It targets companies with 30% female representation on boards and in executive roles, management and the workforce.
The LGIM fund will have an ongoing charge figure (OCF) of 0.5%.
Morrissey’s star power
Morningstar director of passives strategies and sustainability research Hortense Bioy said Morrissey brought star power to the launch, in a savvy marketing move by LGIM.
“In the active fund world, you have star managers. In the passive world, you have indices, which truthfully don’t quite have the same appeal. That’s clever marketing. And it’s for a good cause.” Bioy said time would tell whether the strategy works. She said gender diversity was an increasingly important issue for institutional investors and would also resonate with millennials and female investors.
Rivals
The €51.8m (£45.3bn, $61.1bn) Lyxor Global Gender Equality (DR) Ucits ETF has an equally-weighted benchmark of 150 global companies. The Sicav has a total expense ratio of 0.2%.
Lyxor head of ETF strategy for Northern Europe Adam Laird said the launch has been most popular with private banks, with some additional institutional interest from continental Europe.
“It’s being used by ESG focused portfolios, specifically those in impact strategies,” Laird explained. Laird said he understood investors mix the ETF with other ethical trend strategies to make an overall index portfolio.
The UBS Global Gender Equality Ucits ETF tracks 100 companies that are leaders in gender equality. The fund has attracted $69.4m since launch in January. Its total expense ratio is 0.3%.
In the active space, Axa Investment Managers launched the AXA WF Mix In Perspectives fund in February 2017. Manager Anne Tolmunen said the fund invests in companies that foster gender diversity and leverage the increasing economic role of women.
The €15.8m Sicav has underperformed the MSCI AC World index over one year, returning 2.4% compared to 4.47% in the index. However, its performance has improved over more recent periods.
