According to many researchers, companies with greater levels of gender diversity on their board of directors were more profitable than their male-dominant counterparts. Gender diversity yields increased productivity, greater innovation, better decision-making, and more employee retention and satisfaction. Per S&P Global data, the stock price of companies that appointed female CEOs outperformed those led by men by an average of 20% between 2017 and 2019[1]. Companies with greater diversity on their boards have also experienced lower volatility in earnings and dividends.
A record number of 33 women now hold the top spot at Fortune 500 companies, representing a significant rise from 24 in 2018. Per Fortune data, women held 15.7% of board seats at Fortune 500 companies 15 years ago. Now, women hold 25.5% of those seats. This ample evidence suggests a new era of women’s leadership in the world economy and politics.
Given this, many investors are seeking to add female-centric companies to their portfolio, although the list is yet small. Following this trend, we have developed the BITA US Women in Power Giants Index (BUWIPG). The BUWIPG looks to capture the Gross Total Return Performance of the largest publicly listed American companies that are led by a female CEO and have massive upside potential in the coming years. With a float-adjusted market cap weighting scheme, the index allows investors to get exposure to this theme while maintaining a market-like risk and return.
It is not a surprise then that women in leadership positions constitute a long-term social change. Check this Bloomberg’s piece that explores the designation of the first female CEO on Wall Street: Jane Fraser for Citigroup Inc.
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