BNY Mellon Investment Management, which manages $1.5 billion among 15 ETFs, is teeing up a pair of exchange-traded funds that push into innovation and women’s empowerment, expanding past the firm’s more traditional equity and fixed income offerings.
The investment unit of Bank of New York Mellon Corp. filed to issue the BNY Mellon Innovators ETF and the BNY Mellon Women's Empowerment ETF, seeking to add a “thematic” dimension to the issuer’s offerings.
The women’s empowerment fund comes as some research says that more diverse companies may outperform less diverse counterparts. Several ETFs focus on women in the workplace: the SPDR MSCI USA Gender Diversity ETF (SHE) is currently the largest, with $211.6 million in assets under management, and the $37 million Impact Shares YWCA Women's Empowerment ETF (WOMN), which launched in 2018. The Hypatia Women CEO ETF (WCEO) began trading earlier this month.
“There's research telling us that they perform, that diversity and diversification outperform,” said Patricia Lizarraga, CEO of Hypatia Capital, on a recent ETF.com podcast. That may be one of the key drivers behind the proliferation of ETFs targeting female empowerment.
The empowerment fund will be actively managed by Newton Investment Management North America, an affiliate of BNY Mellon. It will target U.S. companies that contribute to gender equality in the workplace and society through hiring practices and the products and services they offer.
Year to date, the SPDR S&P 500 ETF Trust (SPY) is up more than 6%, while SHE is up 5.6%.
Innovators ETF to Compete With ARKK
The innovators fund targets disruptive innovation, similar to the popular ARK ETFs founded by Cathie Wood. While the $7.2 billion flagship ARK Innovation ETF (ARKK) tanked last year, it’s gained more than 29% so far in 2023, according to Morningstar. However, the fund has seen outflows so far THIS YEAR after pulling in $1.2 billion during 2022.
The BNY Mellon Innovators ETF will be actively managed like the women’s empowerment fund, and will combine fundamental and thematic research to identify U.S. companies that have good prospects for strong growth, the prospectus says. It will also be managed by Newton.
A recent shift in sentiment away from value investing may provide fertile ground for the BNY Mellon innovator fund when it launches.
Contact Heather Bell at [email protected]