Women Rarely Manage ETFs. Meet the Team Looking to Change That

The $6.5 trillion US ETF industry boomed in 2022 as innovative product debuts and market volatility fueled a near-record number of launches. But the fanfare revealed a major flaw in the space: the lack of women helming the funds.

Just 11% of US fund managers are women, a figure that hasn’t budged in the last decade, according to Morningstar Inc. Fund management teams comprised exclusively of women make up a meager 2% of all equity, fixed income and diversified funds.

Emerge, a Toronto-based independent fund manager with a branch in Buffalo, New York, is striving to improve those figures with one of the first all-woman exchange-traded fund investment teams in the US. In September, the firm launched five US-based ETFs, each overseen by women, which will invest in companies that promote higher environmental, social and governance standards.

Part of the goal is to establish a pipeline for women to make the leap into portfolio management, according to Chief Executive Officer Lisa Langley. While gender pay gaps and a lack of support in managing work-life balance may be notable factors in the lack of women heading ETFs, a key issue is a lack of mentors, she adds.

Emerge is introducing its first set of active sustainable ETFs with a twist, each fund will be overseen by women.

“We’re not asking for charity. We’re asking for an opportunity,” Langley said in an interview. “There hasn’t been enough of us as a group at the table to say, ‘Hey, it can be done.’”

Still, it’s a difficult time to be launching new funds. Of all ETFs that were introduced in 2022, 67% are underwater. New ESG fund launches in the third quarter dropped 37% from the same period in 2021, and market concentration means that the average size of most sustainable funds is less than $100 million in assets, according to Bloomberg Intelligence.

Bloomberg sat down with the Emerge team — Langley, Cate Faddis, Jane Li, Josephine Jimenez and Catherine Avery — to discuss how they plan to rise within the industry’s male-dominated ranks, what advice they have for women who wish to manage assets and why ESG investing is so vital.