‘Gender Lens’ Investing in the Wake of Roe:
Regardless of an investor’s political affiliation, the overturning of Roe V. Wade has the potential to have larger economic implications and has triggered gender equality discussions across the country; According to Morgan Stanley, a more diverse workforce, represented by women across all levels of the organization, has been correlated with higher average returns.1
“Research shows that greater gender diversity at a company is related to higher value appreciation, improved risk-adjust returns, and better defended profitability moats.”2
Supreme Court curbs EPA’s power to limit greenhouse gas emissions:
In a 6-3 ruling, the court decided the EPA does not have broad authority to shift the nation’s energy production away from coal-burning power plants toward cleaner sources, including solar and wind power.
“The direct impact of the West Virginia case will be significant but not cataclysmic. Its effects will be limited to the power sector and it will not impair the EPA’s authority to regulate greenhouse gas emissions from transportation, oil and gas exploration, manufacturing, and other activities.” - Bloomberg Law.3
Fast Facts – How do women impact the financial industry today?
Figure 1: Significant Opportunity with Women Gaining Wealth
Sources: BMO Wealth Report, Forbes, as of December 2020.
How do women view values-based investing, and has that view changed over time?
Figure 2: ESG Related Issues by Age Group: 47-67% (of Men & Women) Consider Female Representation Extremely/Very Important
Source: New York Life Investments, RTi Research, as of December 2022. Data presented in this report are derived from a 2022 study conducted by New York Life Investments in partnership with RTi Research. The study employed quantitative methods to determine the degree of importance investors place on environmental, social and governance issues and how these issues impact their investment decisions in the U.S. (Sample size: N=300).
Product Feature – IQ Engender Equality ETF (EQUL)
Insights from Maria Rahni
So how does one go about investing in such companies and potentially capitalizing on this theme? While it has historically been difficult to measure and obtain this type of information from companies, just as firms are increasingly reporting on certain environmental metrics, they are also moving towards greater transparency when it comes to social metrics. However, as we have seen with most things ESG, metrics are not standardized, so defining what data points should be used to score a company on how they well support gender equality can be challenging.
Therefore, when it came time to create our own investable product we turned to experts in the field: Equileap.7 Launched in 2016, they are an independent data provider that specializes in obtaining a wide range of gender metrics and using that information to rate companies on gender equality. Equileap evaluates over 3,000 companies across 4 key dimensions: gender balance in the workforce, equal compensation & work-life balance, policies promoting gender equality, and a commitment to women’s empowerment.
While the fund was launched relatively recently, so far performance has been attractive vs. the largest and most well-known ETF covering this theme, the SPDR SSGA Gender Diversity ETF (SHE) (Figure 3).
Click on the fund name for the most current fund page, which includes, the prospectus, investment objectives, performance, risk, and other important information. Returns represent past performance which is no guarantee of future results. Current performance may be lower or higher. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Visit newyorklifeinvestments.com/funds or newyorklifeinvestments.com/etf and for the most recent month-end performance.
Source: Morningstar, as of 6/30/2022. Past performance is no guarantee of future results.
Returns represent past performance which is no guarantee of future results. Current performance may be lower or higher. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Performance reflects a contractual fee waiver and/or expense limitation agreement in effect through 8/31/22, without which total returns may have been lower. Visit www.newyorklifeinvestments.com for the most recent month-end performance. Expenses stated are as of the fund's most recent prospectus.
Total annual fund operating expenses: 0.46%.
Total annual fund operating expenses after waiver/reimbursement: 0.45%.
1. Source: Morgan Stanley, “Why Gender Diversity May Lead to Better Returns for Investors,” as of March 7, 2022.
2. Source: S&P Global, “Gender equality in the workplace: going beyond women on the board,” as of February 5, 2021.
3. Source: Bloomberg Law, “SCOTUS Ruling in West Virgnia v. EPA Threatens All Regulation,” as of July 8. 2022.
4. Source: Forbes, “Five Reasons Women are Taking the Lead in Financial Planning,” as of August 2020,
5. Source: S&P Global, “When Women Lead, Firms Win,” as of October 16, 2019.
6. Source: New York Life Investments, RTi Research, as of December 2020.
7. EQUL utilizes the Gender Equality Scorecard™ developed by Equileap, an independent data provider with a broad scope of gender metrics, enabling investors to make data-informed investment decisions. EQUL tracks the Solactive Equileap US Gender Equality Index, which was built in alignment with Equileap, a leader in gender equality research. This research in turn provides gender metrics to assess the risk and opportunities presented by gender (in)equality in financial markets. Equileap evaluates over 4,000 companies globally across 19 criteria, including gender balance of the workforce, senior management, and board of directors; pay gap transparency and strategy; parental leave programs; and sexual harassment policies.
Before considering an investment in the Fund, you should understand that you could lose money. Foreign securities can be subject to greater risks than U.S. investments, including currency fluctuations, less liquid trading markets, greater price volatility, political and economic instability, less publicly available information, and changes in tax or currency laws or monetary policy. These risks are likely to be greater for emerging markets than in developed markets.
Large-Capitalization Companies Risk: Large-capitalization companies may be less able than smaller capitalization companies to adapt to changing market conditions. Large-capitalization companies may be more mature and subject to more limited growth potential compared with smaller capitalization companies. During different market cycles, the performance of large capitalization companies has trailed the overall performance of the broader securities markets.
New Fund Risk: The Fund is a new fund. As a new fund, there can be no assurance that it will grow to or maintain an economically viable size, in which case it could ultimately liquidate.
Small and mid-cap stocks are often more volatile than large-cap stocks. Smaller companies generally face higher risks due to their limited product lines, markets and financial markets.
ESG Investing Style Risk Impact investing and/or Environmental, Social and Governance (ESG) managers may take into consideration factors beyond traditional financial information to select securities, which could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. Further, ESG strategies may rely on certain values based criteria to eliminate exposures found in similar strategies or broad market benchmarks, which could also result in relative investment performance deviating. There is no assurance that employing ESG strategies will result in more favorable investment performance.
Gender Equality Investing Style Risk: The returns on a portfolio of securities that excludes companies that have not adopted the gender diversity and inclusion practices and policies may trail the returns on a portfolio of securities that includes companies that have not adopted these practices and policies. Investing only in a portfolio of securities that are gender diverse may affect the Fund’s exposure to certain types of investments and may adversely impact the Fund’s performance depending on whether such investments are in or out of favor in the market
Consider the Fund's investment objectives, risks, and charges and expenses carefully before investing. The prospectus and the statement of additional information include this and other relevant information about the Fund and are available by visiting www.newyorklifeinvestments.com or calling 888-474-7725. Read the prospectus carefully before investing.
“New York Life Investments” is both a service mark, and the common trade name, of certain investment advisors affiliated with New York Life Insurance Company. IndexIQ® is the indirect wholly owned subsidiary of New York Life Investment Management Holdings LLC and serves as the advisor to the IndexIQ ETFs. ALPS Distributors, Inc. (ALPS) is the principal underwriter of the ETFs, and NYLIFE Distributors LLC is a distributor of the ETFs. NYLIFE Distributors LLC is located at 30 Hudson Street, Jersey City, NJ 07302. ALPS Distributors, Inc. is not affiliated with NYLIFE Distributors LLC. NYLIFE Distributors LLC is a Member FINRA/SIPC.