New ETF Focuses On LGBT Support

Fund targets companies demonstrating support for lesbian, gay, bisexual and transgender community via their employment practices.

Today, InsightShares, a new ETF issuer tied to UBS, rolled out its first ETF, a fund that invests in companies that demonstrate support for the LGBT community in their employment practices. The InsightShares LGBT Employment Equality ETF (PRID) tracks an index from UBS that incorporates a variety of factors, including data from the Human Rights Campaign (HRC).

The fund comes with an expense ratio of 0.65% and lists on the NYSE Arca.

“We see increasing demand among various investor segments for investments that align with their values, particularly among millennials and high net worth investors,” said Richard Cea, executive director of exchange-traded products at UBS. “ESG investors may have many motivations, including factor exposure, diversification or values-based investing. We see PRID as an opportunity to invest alongside a specific cause.”

He further points out that the UBS Optimus Foundation will make donations based on a percentage of PRID’s revenues to an LGBT-related charity. For investors looking to support LGBT rights, this gives the fund a sort of two-pronged approach that may be appealing.

Methodology

PRID’s underlying index is constructed around the HRC’s Corporate Equality Index (CEI), which evaluates companies’ LGBT workplace inclusion relative to their peers, as well as publicly available information on donations, lawsuits and allegations.

U.S.-listed companies with a CEI rating of 85 (out of 100) or higher that have at least $1 billion in market capitalization and positive operating income for the prior 12-month period, among other requirements, are generally eligible for inclusion. At the start of the year, the component list included 269 companies, according to the prospectus.

“The construction is designed to create an index that is both economically viable and socially conscious,” Cea said.

The index is weighted by market capitalization and updated annually, which is how often the CEI survey is conducted.

Contact Heather Bell at [email protected]