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Gender Diversity Experiences Large Pull-out of Capital
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CaptainCup Offline
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Gender Diversity Experiences Large Pull-out of Capital
I found this article in an industry publication run by the Financial Times. I had to access it through a subscription, so I am pasting the text of the article in this thread.

My Quick Summary:

An Investment Services company started an exchange-traded fund (i.e. an investment portfolio) that invests in companies with large numbers of women in leadership positions.

California State Teachers Retirement System (CALSTRS) invested over 70% of the capital to this farce of an idea.

Performance was unimpressive: one year it lost money but not as much as the wider market; in another year it underperformed in an up market.

Just this month, CALSTRS, the main investor, decided to pull all of its capital.

Although it was suggested that CALSTRS was going to take this investment strategy in-house, it is not clear how much they will continue to invest.

I find it ironic that a cucked state like California is seemingly having second thoughts about the financial benefits of gender diversity. On the other hand, if they continue this investment strategy, they are just hastening their own collapse and will have plenty of pauperized retired teachers serving coffee for a living.

I’m interested in whether this product will survive and if I can earmark some space in the “Get Woke Go Broke” thread.



The Article:

ETF Behind 'Fearless Girl' Suffers Big Client Redemption

By Jackie Noblett February 1, 2019

The pension fund that drove the launch in 2016 of State Street Global Advisors’ buzzy SPDR SSGA Gender Diversity Index ETF has pulled its investment in the product.

The California State Teachers' Retirement System (CALSTRS) disclosed today that it would bring the assets allocated to the ETF in-house and would license from State Street a version of the proprietary index that the “SHE” ETF tracks. The index weighs U.S. large-cap stocks based on the presence of women in CEO, board director or senior leadership roles.

The assets were redeemed from the fund following the market close yesterday.

CALSTRS owned 73.7% of SHE’s outstanding shares as of Sept. 30, according to regulatory disclosures. Those 3.4 million shares would represent about $231.2 million of SHE’s $350 million in assets as of the end of Wednesday.

The Gender Diversity Index ETF received significant attention in 2017 when it was seen as the inspiration behind the “Fearless Girl” statute erected near the famous Wall Street bull in Manhattan. State Street commissioned the bronze figure to bring attention to the lack of gender diversity on corporate boards. The firm timed the statue’s unveiling with the one-year anniversary of the ETF’s launch.

Despite the massive redemption, a State Street official says there are no plans to close the product.

“State Street Global Advisors remains committed to the investment thesis that better gender diversity in organizations leads to better long-term financial results and we continue to see interest in the fund from clients and prospects alike and we are committed to its success,” a company spokeswoman says in a statement to Ignites.

State Street Global Advisors knew from the beginning that CALSTRS’ long-term plan was to run the allocation internally, according to the spokeswoman.

The giant pension fund provided $250 million in seed capital to the ETF upon its launch in March 2016. Calstrs originally approached State Street about developing an institutional separate account to focus on companies that are gender-inclusive, but the two organizations eventually decided to launch an ETF that would make the strategy available to a wide audience.

The ETF’s negative 3.4% return for last year actually beat the average large-cap blend ETF by nearly 3 full percentage points, putting it in the top 10% of its Morningstar group peers, according to data from Morningstar Direct. In 2017, however, returns of 19.5% lagged the peer group average by 76 basis points, placing it in the bottom third of its category.

The Gender Equality Index ETF was State Street’s first ETF to track a proprietary index. Since then, the Boston-based shop has applied its self-indexing capabilities to overhaul a range of low-volatility smart-beta ETFs in 2016 as well as to underpin some of the low-cost “Portfolio” ETFs it launched in 2017.

State Street managed $572 billion in U.S. ETF assets at the end of 2018, Morningstar Direct data shows. The ETF family generated nearly $1.6 billion of inflows last year, according to the Chicago-based fund tracker.
02-12-2019 07:57 PM
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CynicalContrarian Offline
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RE: Gender Diversity Experiences Large Pull-out of Capital
They simply needed Elizabeth "Theranos" Holms to run things...
02-13-2019 05:50 PM
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Handsome Creepy Eel Offline
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RE: Gender Diversity Experiences Large Pull-out of Capital
Obviously those women-run companies produce poor returns because they are targeted and sabotaged by male-run companies, just like poor Venezuela is sabotaged by USA... and the solution is to force male-run companies to share their profits with female-run companies until such a time when all companies are female-run and there is no more sabotage.

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02-13-2019 06:06 PM
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Atlanta Man Offline
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RE: Gender Diversity Experiences Large Pull-out of Capital
Can they get rid of that stupid "Fearless Girl" statue now?

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02-13-2019 06:59 PM
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Sp5 Offline
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RE: Gender Diversity Experiences Large Pull-out of Capital
SHE graph is almost identical to SPY graph.
   
02-13-2019 07:19 PM
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DarkTriad Offline
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RE: Gender Diversity Experiences Large Pull-out of Capital
(02-13-2019 06:59 PM)Atlanta Man Wrote:  Can they get rid of that stupid "Fearless Girl" statue now?

Well, it was accurate...she was completely opposed to bullish markets, even when everyone else was riding it and having a great time.
02-14-2019 12:43 PM
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Investment Bro Offline
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RE: Gender Diversity Experiences Large Pull-out of Capital
(02-13-2019 07:19 PM)Sp5 Wrote:  SHE graph is almost identical to SPY graph.

Nothing will outperform the broader market given enough time.

That said, probably not a very innovative portfolio. My guess is it was just using the tagline as a way of attracting capital to what amounts to a market portfolio in this instance.

Either way, another lame attempt at making women relevant in an out of place industry.

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02-14-2019 03:05 PM
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CaptainCup Offline
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RE: Gender Diversity Experiences Large Pull-out of Capital
@Investment Bro and Sp5

Your comments are now making me wonder whether they even constructed a “feminist index” or whether this is just an S&P500 portfolio with a gender diversity tag slapped on it.

I can hear a feminist driven study coming out. “Companies that have large numbers of women in senior management perform in line with the market as evidenced by SHE.”
02-14-2019 03:27 PM
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Sp5 Offline
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RE: Gender Diversity Experiences Large Pull-out of Capital
^^^^
It's just a marketing ploy to attract money that might have otherwise gone to another fund manager.
SHE is probably the broadest subset of SPY that can fit into whatever bullshit female criteria they describe in the prospectus and to the SEC.
02-14-2019 05:41 PM
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