BETTER TOGETHER. Introducing the SPDR SSGA Gender Diversity Index ETF (SHE)

Transcription

1 BETTER TOGETHER Introducing the SPDR SSGA Gender Diversity Index ETF (SHE)

2 TALK ABOUT IMPACT Over the past generation, women entering the workforce have had a powerful, positive effect on the American economy. Professional & Technical Workforce 1 51 % Women Sole Professional or Primary 25 Source workforce of Family 1 Income 2 40 % Women GDP Growth* From % Due to Women Yet, the more things change, the more they remain the same at least in the C-Suite. Despite women s increased participation in the business world, there has been relatively little change in female representation at the highest levels of corporate leadership. Amazingly, nearly 100 years since women gained the right to vote and 45 years since the passage of Title IX, just 4 percent of American companies in the S&P 500 are led by a woman CEO. 4 In fact, today there are fewer female CEOs in S&P 500 companies than in *GDP growth is driven by two factors, workforce expansion as well as productivity increases. GDP was calculated in 2005 dollars, assuming total hours worked by women remained unchanged since 1970 and keeps gains from productivity constant. Source: BLS; McKinsey analysis. State Street Global Advisors 1

3 Women in S&P 500 Companies CEOS 4.0 % BOARD SEATS 19.2 % EXECUTIVE & SENIOR LEVEL 25.1 % FIRST & MID LEVEL 36.8 % S&P 500 LABOR FORCE 45.0 % Source; Catalyst, Women CEOs of the S&P 500, Accessed on February 3, 2016 at: The graphic above is for illustrative purposes only and is not drawn to scale. Making progress toward greater gender-diverse corporate leadership could be the first step toward what a 2015 McKinsey Global Institute report referred to as a full potential scenario where women participate in the economy identically to men. That could add up to $28 trillion, or 26 percent, to annual global GDP by 2025 growth roughly equal to the size of the combined Chinese and US economies. 6 2 State Street Global Advisors 2

4 GENDER-DIVERSE LEADERSHIP Academic research shows that men and women think, lead and solve problems differently. 7 Research has also indicated that deploying these different approaches in concert can lead to better decisions, greater innovation and potentially, stronger business results. 8 The Impact of Gender-Diverse Leadership Teams Observed in an MSCI Study Companies With Strong Female Leadership* Companies Without a Critical Mass of Women at the Top^ 10.1 % Return on Equity 7.4 % Return on Equity 36.4 % Higher Return on Equity for companies with strong female leadership compared to companies without a critical mass of women at the top. The methodology used in MSCI s study is different than that of the index, and as such, the results of the study should not be viewed as indicative of the future performance of the index or SHE. Return on equity is not representative of the performance of any investment or the potential return of any ETF. Source: MSCI, Women on Boards: Global Trends in Gender Diversity on Corporate Boards, November * MSCI defined strong female leadership as having a board of directors with at least three women or a higher percentage of women than the average in the company s country. ^ Companies with less than three women on their board of directors or a lower percentage of women than the average in the company s country. State Street Global Advisors 3

5 BETTER BUSINESS Gender diversity in the workplace has been found to be beneficial and several European countries have passed legislation that requires 30 percent, or even 40 percent, of corporate board members to be female. 9 In the US, no such legislation exists. Percentage of Females Required on Corporate Boards 40 % France Iceland Norway Spain 33 % Italy 30 % Belgium Germany Netherlands Source: Smale, Alison, Germany Sets Gender Quota in Boardrooms, New York Times, March We believe that investments in companies with gender-diverse leadership may influence corporate America to follow suit. As an investor, YOU can make a difference. State Street Global Advisors 4

6 Introducing SHE The SPDR SSGA Gender Diversity Index ETF A transparent, relatively low-cost way to invest in companies that have achieved greater levels within their sectors of gender diversity at the senior management level. SHE celebrates companies that achieve greater levels of senior leadership gender diversity with: LEADERSHIP SHE invests in US large-capitalization companies that rank among the highest in their sector in terms of gender diversity within senior leadership positions. INFLUENCE By investing in companies with gender-diverse senior leadership, SHE may inspire conversation and action to increase gender diversity in company leadership teams. IMPACT SSGA will direct a portion of its revenue to charitable organizations that seek to partner in innovative ways with educational programs to remove bias and empower women to take their place in business leadership. State Street Global Advisors 5

7 A PROPRIETARY INDEX Built on the Diversity It Promotes We created the SSGA Gender Diversity Index to focus on the largest US companies that have the highest levels within their sectors of senior leadership gender diversity. Seeking to isolate the potential for gender diversity to drive returns, the Index seeks to minimize variations in sector weights compared to the composition of the index s broader investment universe by focusing on companies with the highest levels within their sectors of senior leadership gender diversity. Additional Impact At SSGA, we want to support organizations that partner with K-12 schools to address gender biases that manifest themselves early on in life. Our goal is to empower girls to take their place in business leadership particularly in industries likely to be in high demand over the next generation where women have low representation today, such as STEM (Science, Technology Engineering, and Math). To support these goals, SSGA will direct a portion of its revenue to such charitable organizations. 6 State Street Global Advisors 6

8 Definitions Market-cap Weighted Indices A type of market index whose individual components are weighted according to their market capitalization, so that larger components carry a larger percentage weighting. 1 Department for Professional Employees, Women in the Professional Workforce. February Accessed February 5, 2016 at: dpeaflcio.org/professionals/professionals-in-the-workplace/ women-in-the-professional-and-technical-labor-force/ 2 Wang, Wendy. Mothers Are the Sole or Primary Provider in Four-in-Ten Households with Children; Public Conflicted about the Growing Trend. Pew Research Center. Accessed on January 20, 2016 at breadwinner-moms/. 3 McKinsey & Company. Women in the Economy: Selected exhibits Accessed on March 3, 2016 at: our-insights/how-women-can-contribute-more-to-the-us-economy 4 Catalyst, Women CEOs of the S&P Accessed on March 3, 2016 at: 5 Sabic, Pavle. How Times Have Changed? CEO Gender Gap Analysis of the S&P 500. S&P Capital IQ. Accessed on February 17, 2016 at: com/documents/our-thinking/research/how-times-have-changed-ceo-gender-gapanalysis-of-the-sp-500.pdf 6 Woetzel, Johnathan. The Power of Parity: How advancing women s equality can add $12 trillion to global growth. McKinsey Global Institute, September Accessed on January 22, 2016 at: how-advancing-womens-equality-can-add-12-trillion-to-global-growth. 7 Why Diversity Matters. Catalyst Information Center Accessed on March 3, 2016 at: matters_catalyst_0.pdf. 8 Woetzel, Johnathan. The Power of Parity: How advancing women s equality can add $12 trillion to global growth. McKinsey Global Institute, September Accessed on January 22, 2016 at: Accessed on January 22, 2016 at: how-advancing-womens-equality-can-add-12-trillion-to-global-growth 9 Smale, Alison, Germany Sets Gender Quota in Boardrooms, New York Times, March Accessed on February 2, 2016 at: com/2015/03/07/world/europe/german-law-requires-more-women-on-corporateboards.html. ssga.com spdrs.com For public use. State Street Global Advisors One Lincoln Street, Boston, MA T: Important Risk Information ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns. Frequent trading of ETFs could significantly increase commissions and other costs such that they may offset any savings from low fees or costs. Concentrated investments in a particular industry or sector may be more vulnerable to adverse changes in that industry or sector. Equity securities may fluctuate in value in response to the activities of individual companies and general market and economic conditions. Gender diversity risk The returns on a portfolio of securities that excludes companies that are not gender diverse may trail the returns on a portfolio of securities that includes companies that are not gender diverse. Non-diversified funds that focus on a relatively small number of issuers tend to be more volatile than diversified funds and the market as a whole. Passively managed funds hold a range of securities that, in the aggregate, approximates the full Index in terms of key risk factors and other characteristics. This may cause the fund to experience tracking errors relative to performance of the index. Past performance is not a guarantee of future results. SPDR is a product of S&P Dow Jones Indices LLC ( SPDJI ), and has been licensed for use by State Street Corporation. Standard & Poor s, S&P and SPDR are registered trademarks of Standard & Poor s Financial Services LLC (S&P); Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); and these trademarks have been licensed for use by S&P Dow Jones Indices LLC (SPDJI) and sublicensed for certain purposes by State Street Corporation. State Street Corporation s financial products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and third party licensors and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability in relation thereto, including for any errors, omissions, or interruptions of any index. Distributor: State Street Global Markets, LLC, member FINRA, SIPC, a wholly owned subsidiary of State Street Corporation. References to State Street may include State Street Corporation and its affiliates. Certain State Street affiliates provide services and receive fees from the SPDR ETFs. Before investing, consider the fund s investment objectives, risks, charges and expenses. To obtain a prospectus or summary prospectus which contains this and other information, call or visit spdrs.com. Read it carefully. Not FDIC Insured No Bank Guarantee May Lose Value 2016 State Street Corporation. All Rights Reserved. ID5911-IBG Exp. Date: 02/28/2017