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ETF Investing in Women CEOs

Mar 30, 2023

In this episode of Engaging Alternatives Spotlight, Elana Margulies-Snyderman, Director, Publications, EisnerAmper, speaks with Patricia Lizarraga, Managing Partner, Hypatia Capital, which manages an ETF that invests in women CEOs. Patricia shares her outlook for investing in female CEOs, including the greatest opportunities and challenges, how the firm is integrating ESG, her experience being a woman in the industry and more.


Elana Margulies-Snyderman:Hello and welcome to the EisnerAmper podcast series. I'm your host, Elana Margulies-Snyderman, and with me today is Patricia Lizarraga, managing partner of Hypatia Capital, which manages an ETF that invests in women's CEOs. Today, Patricia will share with us her outlook for investing in female CEOs, including the greatest opportunities and challenges, how the firm is integrating ESG, her experience being a woman in the industry, and more. Hi Patricia. Thank you so much for being with me today.

Patricia Lizarraga:Thank you, Elana. Thank you for having me.

Absolutely. So Patricia, to kick off the conversation, tell us a little about the firm and how you got to where you are today.
PL:Sure. So I started Hypatia Capital 15 years ago. I was an M&A banker, and therefore my clients were primarily CEOs, CFOs, and we would present to board chairs. And very occasionally I would come across a female client and I would always be so impressed with their business acumen and the actual results of their companies, and I kept on thinking, "Wow, I really want more clients like this." And I realized that if I wanted more female clients, I would have to build that firm myself.
EMS:Patricia, that's a nice segue into the following question I have for you. So given your focus on investing in female CEOs, I would highly welcome you to share your outlook for the space.
PL:Sure. So Hypatia Capital builds something we call the Hypatia Women CEO Index. And we built that index to measure the performance of what we call the Female Factor, right? So public companies with female CEOs, and we eliminate other factors such as size, industry, momentum, et cetera. So this index, while different than the ETF, shows an outperformance of 300 basis points since inception in 2018 versus its benchmark, and its benchmark is the FT Wilshire Small Cap Index. And it actually shows over 500 basis points of outperformance versus the S&P 500 in 2022. It is Hypatia's belief that the isolated female factor outperforms and will continue to do so until equality is reached. And our investment thesis is that women outperform because of, as McKenzie tells us, the many obstacles for women achieving that top spot in the corporate ladder. So from that point of view, we are very optimistic about the outlook for women's CEOs.
EMS:Indeed, Patricia, it's a very exciting time in your space. So I'd love to hear more specifically some of the greatest opportunities you see, and why?
PL:Hypatia sees the greatest opportunity to connect investors who believe in equality with the opportunity to allocate their US public equities that way. We may not be able to change the world overnight, but we can reach a hundred percent gender equality in leadership in our own equities' portfolio today.
EMS:And Patricia, on the other hand, what are some of the greatest challenges you're up against and why?
PL:So Hypatia's greatest challenge is distribution, because we're small and we have one product, and AUM must grow substantially to be included on the largest wealth platforms. So visibility for our product is key and therefore we are really making every effort to get as many women to know that we exist as possible. As many investors, women and men actually.
EMS:Great, Patricia. That segues into the follow-up question I have for you, which touches on ESG, which is top of mind for your industry, and highly welcome your thoughts on how your firm is addressing this.
PL:Sure. So I think it's important to differentiate ESG from value-based investing. ESG, in general, is a framework for measuring, evaluating, and ranking companies based on a number of different criteria that have to do with environmental, social, and governance. It is a measurement framework. Value-based investing is investing according to one's values, i.e. choosing investments because they specifically invest in certain values. And in the WCEO ETF specifically that is investing in gender equality and leadership.
EMS:Great, Patricia. Just hearing our brief conversation, you're such a source of inspiration and would love for you to share your experience being a woman in the industry and how you're paving the way for the next generation, for future women leaders.
PL:Of course. And my biggest aspiration is for all women to invest their portfolios for equality. As women, we control our spending and our investments. So the more we use our investments intentionally, the more we can contribute to the change that we desire. And again, we can't change the world overnight, but we can now easily change our portfolio to reflect the world we would like to live in with respect to gender equality and leadership.
EMS:Patricia, we've covered a tremendous amount of ground today, so I wanted to see what your future plans are for the firm.
PL:Sure. Right now we are very focused on amplifying the reach of the WCEO ETF. Distribution is our biggest challenge, as we said. And as more women realize they can have a balanced equities' portfolio, from a gender equality and leadership perspective, we hope to continue creating products that will create this opportunity in other asset classes and other geographies as well.
EMS:Patricia, I wanted to thank you so much for sharing your perspective with our listeners.
PL:Well, thank you very much, Elana, for having me. I very much enjoyed it.
EMS:Absolutely. And thank you for listening to the EisnerAmper podcast series. Visit for more information on this and a host of other topics. And join us for our next EisnerAmper podcast, when we get down to business.

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Elana Margulies-Snyderman

Elana Margulies-Snyderman is an investment industry reporter and writer who develops articles, opinion pieces and original research designed to help illuminate the most challenging issues confronting fund managers and executives.

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