UBS Promotes LGBT Rights to Start U.S. ETF Business With a Twist
(Bloomberg) -- UBS Group AG is starting an exchange-traded fund that will invest in companies that promote equality for lesbian, gay, bisexual and transgender employees in the workplace.
The InsightShares LGBT Employment Equality ETF, UBS’s first ETF in the U.S., will start trading today under the ticker PRID, said Rich Cea, executive director of exchange traded products at UBS.
But the Zurich-based bank won’t be running the fund. That responsibility lies with Exchange Traded Concepts, a company that specializes in bringing new funds to the market. UBS will instead provide the index the fund tracks -- and, crucially, its InsightShares brand.
“We’re the index provider, we’re the brand provider, because we’re looking to be a leader in socially conscious ETFs,” Cea said. “It’s a market segment where we believe there is opportunity if you can design value added strategies.”
While this is UBS’s first venture into the U.S. ETF market, the firm’s exchange-traded notes -- a cousin of ETFs that are usually issued by banks -- manage more than $7 billion. UBS’s brand is something that the new fund will need to stand out in the crowd of socially-conscious, values-based, impact-focused and green ETFs have come to the market over the last 12 months.
PRID will track an index based on a Human Rights Campaign Foundation gauge of corporate equality. Companies in the benchmark must have a market capitalization of at least $1 billion and positive operating income over the prior 12 months. A proportion of the fund’s revenue will also be donated to an LGBT-related charity each year.
Of course, doing the right thing doesn’t come cheap. PRID will carry a management fee of $65 for every $1,000 invested. However, that’s less than the $75 charged for the Alps Workplace Equality Portfolio Fund, EQLT, which also focuses on LGBT rights.
The Swiss bank is planning other funds under the InsightShares brand that will focus on ‘‘global sustainability leaders’’ and ‘‘military veterans’’ and will also be issued by Exchange Traded Concepts, regulatory filings show.
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