Nine percent of the companies in the Fortune 500 still don’t have LGBTQ protections for their employees. That’s 45 companies. Gender identity protection is even weaker, at 17 percent of 85 of the world’s largest companies. That’s why we’ve increased our investment into socially responsible investments (SRI), specifically with those that support companies that protect all their employees regardless of sexual orientation or gender identity.
SRIs have significantly increased in popularity since 2000. Initially, they focused on avoiding “sin stocks,” or stocks for publicly traded companies that sell pornography, tobacco, guns and alcohol. Then, people started increasing investments in environmentally friendly companies, or “green stocks.” Today, there are numerous SRIs that support and promote conscious causes of all sorts, from renewable energy to clean water to those that support the queer community.
Investing in these companies fosters what John Roberts of Segall, Bryant and Hamill, and founder of the Workplace Equality Index, called on the “Queer Money” podcast, “the new economy.” He, along with Todd Sears of Out Leadership, believe in what’s called the “return on equality,” which shows that companies with equality as a core value of their business model see better bottom-line growth than companies that don’t. Therefore, not only are those 9 percent of companies in the Fortune 500 hurting their bottom line, they’re providing lower shareholder returns than they otherwise could.
Given this information, if you’re interested in investing in LGBTQ SRIs like we have (and you should be), you might be wondering where to start. It’s simple. There are several exchange-traded funds (ETFs) that do this type of investing for you.
The EQLT ETF, available through ALPS funds, is managed by Roberts and tracks the aforementioned Workplace Equality Index. It reviews the corporate policies and procedures of companies all over the globe to see if they include LGBTQ protections for their employees. Then, Roberts’ team takes it a step further and contacts the employees of those companies to understand if the company really walks the walk.
It’s one thing for a company based in New York City or San Francisco to include such protections in their employee handbook. It’s quite another for managers and co-workers in the most rural parts of the country to make their queer employees feel safe and to give them equal opportunities. It also shows which companies only show up for pride parades in June for PR purposes.
The PRID ETF was recently launched by UBS, one of the largest investment firms in the world. PRID is a basket of publicly traded companies with a Human Rights Campaign (HRC) Corporate Equality Index score of 85 to 100.
To be included on the HRC Corporate Equality Index — and, thus, the PRID ETF — a company must essentially have a minimum market capitalization of $1 billion; include LGBTQ protections in its policies and procedures, including nondiscrimination policies for vendors and suppliers; and have made a reasonably sized donation to an LGBTQ-friendly charity within the previous 12 months.
Additionally, UBS uses a portion of its expense management fee for the PRID ETF to give back to the queer community.
More on Investing Responsibly: How I Make My Money Match My Morality
Finally, there’s State Street’s SHE ETF. SHE isn’t LGBTQ-specific, but it does track companies with gender diversity in their workplace, specifically those with women in senior-level positions. While many of them are cisgender women (meaning their gender identity corresponds with their birth sex), the number of transgender women is increasing. There are also more and more lesbian women. That diversity is good for everyone.
The three ETFs above often overlap with the companies included in their portfolios. In fact, you’ll often find that SRI ETFs and SRI-managed portfolios overlap simply because the consciousness of these companies is similar.
If you’re like us and want to invest in companies that support the queer community, look closely at each of these ETFs or talk with a financial advisor to see which, if any, may be appropriate for your investing needs, goals and objectives. If you’re simply looking for one or a few companies that support our community to buy into, start your search with the investment holdings of these ETFs.
If you’re not comfortable investing on your own, you don’t have to go it alone. There are numerous solutions for those who want more help.
You can look for and work with a financial advisor that has the College of Financial Planning’s Accredited Domestic Partner Program (ADPP) certification. Financial advisors with this designation have gone through additional training and testing to better understand the unique needs of LGBTQ people and domestic partners. Likewise, GuideVine is a company that vets and promotes financial advisors. They’ve dedicated a page on their site to financial advisors who have or want to work with LGBTQ people. They’re also well-versed in LGBTQ-friendly investments.
This is the why and the how of our LGBTQ investing — how we’re helping spread equality in our own way and supporting companies that support us. Join us.
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