Barclays launches ‘exchange-traded note’ that follows female-led US companies

Barclays, the UK banking group, has launched a so-called exchange-traded note (ETN) which, through a focus on female-led US companies, is specifically targeted to socially responsible investors. Barclays’ “Women in Leadership” ETN, which began trading today (July 10) in New York, follows a basket of 85 listed US companies whose chief executives are either women or whose boards are at least 25% female. The firms also have a market capitalisation of at least $250m and are traded on the New York Stock Exchange or Nasdaq. Examples of the firms the ETN tracks include General Motors, IBM and PepsiCo, which have female CEOs, as well as Verizon, General Electric and Pfizer, which meet the threshold for female board representation. To select the 85 companies, Barclays relied on research provided by ISS, the US ESG (environmental, social and governance) firm.
“There’s this large and growing pool of investors that have socially responsible mandates. So we’re moving into this exchange-traded way of investing in diversity,” said Sue Meir, Barclays’ Chief Operating Officer for equity sales, during a press briefing in New York.Barbara Byrne, Barclays’ Vice Chairman in Investment Banking, said there was a growing body of research suggesting that companies with “gender-diverse leadership” outperformed those without. A recent analysis by Fortune Magazine revealed that US listed firms with a female CEO returned 103.4% during the length of tenure. The benchmark S&P 500, meanwhile, gained just 69.5% over the same period. Byrne said: “We believe that providing ETNs and indices that enable investors to allocate capital to this theme will provide a market-based approach to help catalyse change.” Pioneered by Barclays, the value of an ETN does not depend on the underlying investments as they do with exchange-traded funds, but instead on the credit rating of the issuer. Standard & Poor’s currently rates Barclays’ debt as ‘A-‘, or four notches above investment grade.