A Mutual Fund All About Women

Investing for WomenIf you go to Morningstar.com and type in PXWEX in the Quote box, you’ll get its take, albeit a limited one, on Pax Ellevate Global Women’s Index Fund [hereafter referred to as PXWEX or Fund], which should be, for obvious reasons, of interest to the membership of WIFE.

This fund made the news in June of this year when Sallie Krawcheck, a former financial superstar with high-profile executive positions at Citibank and Bank of America, announced that her global women’s advocacy network, Ellevate, was joining forces with Pax World Investments, to create PXWEX. As expressed on its website, the “Fund is the first of its kind – and is the only mutual fund in the United States that focuses on investing in the highest-rated companies in the world in advancing women’s leadership.”

The Wall Street Journal’s Daisy Maxey, at the time, commented that [PXWEX] “… is an intriguing concept: investing in stocks of companies with female leadership. Backed by studies that say such companies perform better, fund companies are stepping in with investments that snub male-dominated companies, and bet on women.”

Maxey added some statistics that show that “… the financial performance at companies with three or more women on the board [in at least four of five years] has outpaced companies with none.” Adding more evidenced-based numbers, her article reveals that the return on equity at Fortune 500 companies from 2004-2008 was 15.3% for those with three or more women directors compared to 10.5% for those with zero.

Pretty impressive. Because of the Fund’s small size, total assets as of August 2014 amount to only $53.9 million, it’s not surprising that Morningstar’s coverage is limited. This being the case, I suggest readers go to PXWEX’s website  for more information and fund data.

That’s what I did, and here’s what I found:

Ms. Krawcheck, whose photo is featured on the home page, sets the tone for encouraging investors to put their money in PXWEX. She clearly believes that, apart from being motivated by a sense of social responsibility, they will also find that the rationale for investing in the Fund is fact-based:

“Research indicates that companies with more women in senior management have higher returns on capital, lower volatility, greater client focus, increased innovation and greater long-term orientation. As a result, I believe they should also deliver better stockholder returns over time.”

The PXWEX fund tracks the Pax Global Women’s Leadership Index:

“This index was constructed by Pax World and MSCI [Morgan Stanley Capital International] and is a market-weighted index of the highest rated companies in the world in advancing women. It is designed to measure and capture the contribution that gender diversity makes to business success over time.”

The Fund’s portfolio is made up of some 78 large-cap stock holdings, which, as of April 2014, had a low turnover ratio of 28 percent. Among other attributes, 100% of these companies’ boards of directors include one or more women; 97% have two or more; and 67% have three or more. With regard to the latter category, the global average is only 13%. The percentage of women in corporate management in PXWEX companies is 24% compared to only 11% for a global average.

As of April 2014, the Fund has had a respectable five-year annual average total return of 12.41% compared to 16.03% for the MSCI World (Net) Index and 16.79% for the Lipper Global Large-Cap Core Funds Index. The Fund’s expense ratio is a reasonable 1.24%.
True to its mission, the Fund is managed by a team of 13 managers, nine of which are women.

A summary statement of the Fund’s management’s investment philosophy reads like this:

“We believe that the Fund represents a market solution to a global business challenge: by helping direct investor capital towards those companies that are embracing gender diversity, the Pax Ellevate Global Women’s Index Fund provides an opportunity for investors to weigh in, and for companies to listen.”

PXWEX’s gender slant certainly makes a strong statement for investing in this “all about women” mutual fund.

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