London / Zurich, 8 January 2018 – UBS today launches the UBS (lrl) ETF plc – Global Gender Equality UCITS ETF as part of its growing suite of impact investment opportunities for its clients.
The ETF will invest in the Solactive Equileap Global Gender Equality 100 Leaders index, an index of 100 leading global companies with a strong record in gender diversity and sustainability. The companies were selected based on 19 diversity criteria, including equal compensation and work-life balance, transparency and accountability, gender balance, and sustainability policies. The index includes the 30 highest rated US stocks, yet caps single issuers at 3% of the ETF's assets. With its broad criteria, the index provides a higher overall gender equality score than other Global Gender Equality Indexes, whilst providing stable risk-adjusted performance.
The ETF is a joint collaboration between UBS Asset Management and UBS Wealth Management and is part of UBS's commitment to sustainable and impact investing. UBS will dedicate 5% of management fees received in relation to the ETF, to philanthropic projects supporting the United Nation's Sustainable Development Goal 5 via the UBS Optimus Foundation. Through its choice of index, the ETF also contributes to Equileap, a social enterprise committed to accelerating progress towards gender equality in the workplace, using the power of investments, knowledge and donations.
In recent research, UBS Wealth Management's Chief Investment Office analyzed several profitability metrics for companies in the FTSE Developed World Index, and found that companies with women making up at least 20% of the board and senior management (higher than the reported averages of 17% and 11% for the index) had higher returns than their less gender-diverse peers. The same was true for companies that have more than 30% women in overall management positions (higher than the reported average of 25%), and for overall 40–60% women employees (the average was 36%).
Michael Baldinger, Head of Sustainable and Impact Investing at UBS Asset Management said: "This is another big step in sustainable and impact investing innovation. The launch of this new ETF provides investors with a unique opportunity to benefit from systematically investing in the leading global companies on gender diversity, based on Equileap's pioneering research into corporate gender diversity, while at the same time having the potential to achieve strong returns."
Clemens Reuter, Head of Passive & ETF Investment Specialists at UBS Asset Management said: "We are very excited to add this innovative index offering, to our SRI product shelf. Since UBS Asset Management launched its first Socially Responsible ETF in 2011, we have continually expanded our offering across equity and fixed income for investors and today have 43 ETFs, including currency hedged share classes, dedicated to SRI and manage over USD 2.7bn as the #1 provider of Socially Responsible ETFs in Europe."
Olga Miler, Managing Director at UBS Wealth Management said: "In 2017 we launched a five-year plan to significantly scale our efforts for female clients and make the wealth management industry work better for women. This ETF is another example of how we are doing that. Gender equality is important to our clients and our business. The combination of broad gender equality criteria, sustainability and donation make this ETF a leap step forward in connecting capital to the United Nations' Sustainable Development Goal 5 – achieving gender equality and empowering all women and girls."
Rachel Whittaker, Sustainable Investing Strategist at UBS Wealth Management's Chief Investment Office said: "Our research indicates that gender diverse companies tend to outperform on various profitability measures. We believe these findings support approaches to gender lens investing that take into account diversity at all levels of the organization as well as in leadership positions."