Women In Leadership ETN Spotlight

| About: Barclays Women (WIL)

Summary

With nearly identical performance to the S&P 500 since inception, investors may see WIL as an expensive means of exposing themselves to SPY performance.

Over a year since WIL launched, and it still has relatively low AUM compared to other ETFs launched the same month.

We dig through the pros and cons of WIL to shed light on a lesser covered ETN.

Background

Launching back in the summer of 2014, the Women in Leadership ETN (NYSEARCA:WIL) has struggled to gain serious investor traction. We wanted to do a spotlight piece focusing on this lesser talked about ETF so that investors and traders alike could see what it is all about.

Based on the chart below comparing the SPDR S&P 500 Trust ETF (NYSEARCA:SPY) performance to WIL performance since inception, it seems on the surface as if investing in WIL is just paying a 0.45% expense ratio for SPY's performance. We dig deeper to learn more about the pros and cons of investing in WIL, and what it takes to make the cut as a holding.

WIL Chart

WIL data by YCharts

The Concept

Essentially, WIL is an ETN investors can use to expose themselves to companies with women in leadership roles. This is best described by the sponsor, Barclays:

"The Index is designed to provide exposure to U.S.-based companies that satisfy one or both of the gender diversity criteria of having a female chief executive officer or having at least 25% female members on the board of directors."

Methodology Critiques

Just because the CEO of a company is not female does not mean that the company does not have women in leadership positions. The filtering methodology for companies described above could end up leaving out companies with women in various other C-suite positions, that may not necessarily meet the alternative board member requirements. After all, in 2015 there were 58 female CFOs in just the Fortune 500 alone. Various companies with women in leadership that may be excluded due to methodology include:

  • Nasdaq, Inc. (NASDAQ:NDAQ) - Chief Operating Officer, Andena Friedman
  • JPMorgan Chase & Co. (NYSE:JPM) - Chief Financial Officer, Marianne Lake
  • Bed Bath & Beyond Inc. (NASDAQ:BBBY) - Chief Financial Officer, Susan Lattmann
  • Microsoft Corporation (NASDAQ:MSFT) - Chief Financial Officer, my Hood
  • The Goodyear Tire & Rubber Company (NYSE:GT) - Chief Financial Officer, Laura Thompson
  • SanDisk (SNDK) - Chief Financial Officer, Judy Bruner

Major Holdings

WIL seeks to track the Barclays Women In Leadership Total Return USD Index. Since in addition to the various leadership requirements, the index also has market cap. requirements, the holdings are large market capitalization stocks with high liquidity by all measures. Selected major holdings of this index include:

  • PepsiCo, Inc. (NYSE:PEP)
  • Pfizer Inc. (NYSE:PFE)
  • General Electric Co. (NYSE:GE)
  • International Business Machines Corp. (NYSE:IBM)

WIL Chart

WIL data by YCharts

Low Liquidity

Relative to major highly traded ETFs, WIL is far less liquid by measures of both spread and volume. This is despite the holdings of WIL being extremely liquid, heavily traded stocks. This makes WIL a costly choice for funds or larger investors trying to get exposure to this basket of companies.

ETF WIL SPDR Gold Trust ETF (GLD) PowerShares QQQ Trust ETF (QQQ)
Average Daily $ Volume $11.53 K $624.12 M $4.36 B
Average Bid-Ask Spread 0.25% 0.01% 0.01%

Low AUM

When compared to two other ETFs launched within a week of WIL, it seems as if WIL is in the lower range of AUM. This is presumably due to lack of performance since inception, mixed with a stiff drop-off in marketing following the launch of WIL.

ETF WIL Calamos Focus Growth ETF (CFGE) Sprott Gold Miners ETF (SGDM)
AUM $25.52 M $24.83 M $91.65 M
Launch Date 07/09/14 07/14/14 07/15/14

High Fees

As mentioned in the background, WIL has an expense ratio of 0.45%, which compared to the broad index fund that it nearly identically tracks (SPY as shown above), is a relatively high fee. This is not to say that WIL did not outperform SPY in the timeframe since WIL's inception, however the difference is <0.75%.

ETF WIL SPY
Expense Ratio 0.45% 0.09%

Other Socially Focused ETFs

Besides WIL, there are a few other ETFs that may be considered socially focused/socially responsible. We have even included a few clean energy ETFs, as they too are ways of socially responsible investing in a way.

  • iShares MSCI USA ESG Select ETF (NYSEARCA:KLD)
  • iShares MSCI KLD 400 Social ETF (NYSEARCA:DSI)
  • First Trust NASDAQ Clean Edge Green Energy ETF (NASDAQ:QCLN)
  • PowerShares Cleantech ETF (NYSEARCA:PZD)

Conclusion

We hope this has been a useful spotlight into a lesser covered ETF, as well as open investors eyes to a recently more popular notion of socially responsible investing. Based on the AUM of this fund, it is tough to tell just yet whether or not it will be here to stay. Additionally, based on the limitations of the underlying index's selection methodology this may not truly represent companies with women in leadership. Regardless, we look forward to keeping investors posted on this and other ETFs as further inspiration for research develops.

References

WIL ETN Website

WIL Holdings

WIL ETN Profile

CFGE ETF Profile

SGDM ETF Profile

SPY ETF Profile

QQQ ETF Profile

GLD ETF Profile

Female CFO Article

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Not investment advice.

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