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With it being International Women’s Day, the spotlight is now on the power of women in business. Companies with strong female representation in executive roles and boardrooms have consistently outperformed predominantly male-led ones in terms of revenue growth, innovation, and shareholder value.

The role of women in leadership has grown significantly over the years despite the challenges in achieving gender parity in corporate leadership. In the United States, women account for approximately 8.2% of CEO roles within S&P 500 companies. Similarly, women represent about 10.4% of leadership positions in Fortune 500 companies, with a record 52 female CEOs leading businesses on the list. 

While betting on an individual company is certainly a good option, investors can also play this space with lower risk and higher diversification benefits in a basket form. Currently, there are a few ETFs like SPDR SSGA Gender Diversity Index ETF (SHE - Free Report), Impact Shares YWCA Women’s Empowerment ETF (WOMN - Free Report), Hypatia Women CEO ETF (WCEO - Free Report), Fidelity Women's Leadership ETF (FDWM - Free Report), and BNY Mellon Women's Opportunities ETF (BKWO - Free Report) that offer broad exposure to women-led companies. 

Multiple studies highlight the economic benefits of gender diversity in the corporate world. According to a McKinsey & Company report, companies in the top quartile for gender diversity on executive teams were 25% more likely to achieve above-average profitability compared to those in the bottom quartile. Research from MSCI shows that firms with at least three women on the board experienced a 10% higher return on equity than those with all-male boards. This suggests that gender-diverse leadership teams may be more effective in driving company growth and shareholder value.

The presence of female leaders fosters better decision-making, broader market insights, and stronger risk management — factors that contribute to long-term financial performance.

Various studies suggest that companies with more women in leadership roles have better risk management capabilities. Women's leadership styles can often be more cautious and inclusive, leading to more thorough risk assessment and management strategies. Women bring in different life experiences and viewpoints, contributing significantly to the diversity.

Further, women control a large portion of consumer spending and, thus, can offer invaluable insights into market trends, customer needs, and product development. Companies with female leaders are often more familiar with market demands.

ETFs in Focus

Presented below is a brief overview of the previously-mentioned ETFs.

SPDR SSGA Gender Diversity Index ETF (SHE - Free Report)

The SPDR SSGA Gender Diversity Index ETF offers exposure to U.S. companies that lead their sector in demonstrating a commitment toward promoting and supporting gender diversity throughout all levels of the organization by tracking the MSCI USA Gender Diversity Select Index. It holds 252 stocks, with none accounting for more than 4.6% share. Looking at the sectors, information technology, financials, healthcare, and consumer discretionary all have double-digit exposure each. 

The ETF has amassed $250.1 million in its asset base while trading in a light volume of about 4,000 shares. It charges 20 bps in annual fees, and it has a Zacks ETF Rank #3 (Hold) rating.

Impact Shares YWCA Women’s Empowerment ETF (WOMN - Free Report)  

The Impact Shares YWCA Women’s Empowerment ETF has attracted $63.8 million in AUM, and it trades in about 3,000 shares a day on average. It tracks the Morningstar Women’s Empowerment Index, which is designed to provide exposure to companies worldwide with strong policies and practices in support of women’s empowerment and gender equality. 

The ETF holds 203 stocks in its portfolio, with none making up for more than 5.3% of the assets. The product charges 75 bps in annual fees, and it has a Zacks ETF Rank #3 (Hold) rating. 

Hypatia Women CEO ETF (WCEO - Free Report)

The Hypatia Women CEO ETF is an actively managed fund that invests in all publicly traded American companies that have female chief executive officers, from small-caps to mega-caps. It holds 176 stocks in its basket, with each accounting for no more than 1.1% of the assets. Industrials, financials, consumer discretionary, information technology, and healthcare all receive double-digit allocation each.

The ETF has accumulated $4.2 million in its asset base, and it charges 85 bps in annual fees. It trades in a volume of under 1000 shares a day on average. 

Fidelity Women's Leadership ETF (FDWM - Free Report)  

The Fidelity Women's Leadership ETF is an actively managed fund that offers exposure to companies that prioritize and advance women's leadership and development. It holds 89 stocks in its basket, with each accounting for no more than 4.7% of the assets. 

The ETF has accumulated $4.5 million in its base, and it charges 59 bps in annual fees. It trades in an average daily volume of 500 shares.

BNY Mellon Women's Opportunities ETF (BKWO - Free Report)

The BNY Mellon Women's Opportunities ETF is an actively managed fund seeking long-term capital growth. It invests principally in U.S. companies that have attractive financial attributes and promote "women's opportunities."

It holds 55 securities in its basket, with each accounting for less than 8% of the assets. Looking at the sectors, information technology takes the largest share at 33.4%, while healthcare, financials, and consumer discretionary round off the next three spots with double-digit exposure each.

The ETF has gathered $15.1 million in AUM, and it trades in an average daily volume of 1,000 shares. It charges 50 bps in annual fees from investors.

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