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New way to support and invest in LGBT-friendly companies

A new exchange traded fund (ETF) created in February 2014 allows investors to buy companies that support LGBT equality. It’s called the Workplace Equality Portfolio and trades under the ticker symbol EQLT. This new ETF is one of the few ways the LGBT community can easily invest in publicly-traded companies that support equal rights.

The ETF tracks an index called the Workplace Equality Index. I’ve explained what an index is in a previous article, but basically an index is a basket of company stocks. To be included in this particular equality-based basket, companies must score 100 percent on the Human Rights Campaign (HRC) Corporate Equality Index. There are many criteria a company must meet in order to achieve a 100 percent score from HRC. For example, they must have non-discrimination policies regarding sexual orientation and gender identity, and provide full benefits for same-sex spouses, domestic partners and transgender individuals.

There’s an interesting story behind the creation of the Workplace Equality Index. Kevin Mossier was an entrepreneur and founder of the gay travel company RSVP Vacations. After he passed away, a foundation was formed in his name and this money was to be invested to fulfill his vision of advancing the cause of human rights and LGBT equality.

The investment management firm charged with this task, Denver Investments, conducted independent research to establish screens to select stocks from companies that were supportive of workplace equality and fairness. This work resulted in the creation of the Workplace Equality Index.

Until a few months ago, there wasn’t a way for investors to support this effort unless they bought stock in all 162 companies. That would cost a lot in trading commissions. Now this can be done with just one trade in the Workplace Equality Portfolio (Ticker symbol: EQLT).

A couple of things to consider before buying EQLT. The expense ratio is 0.75 percent. That’s not bad when compared to the average mutual fund expense ratio of 1.00 percent. But it is high when compared to other index-tracking ETFs with expense ratios below 0.10 percent.

EQLT is also a new ETF with only $5 million in assets. Compare this to the Vanguard S&P 500 ETF that has $165 billion in assets.

An investor doesn’t lose their money if an ETF closes. This ETF still owns stock in 162 large publicly-traded companies.

It’s exciting to see this new ETF focused on LGBT-friendly companies. If successful, EQLT can encourage other companies to add workplace equality policies for their LGBT employees. But like any investment, each investor must do their own research. You can find out more information by visiting www.eqltfund.com and www.workplaceequalityindex.com

Steve Doster is a Certified Financial Planner™ professional providing commission-free financial advice for do-it-yourself investors. You can reach Steve at Doster Financial Planning by phone 619-688-1192 or email steve@dosterfinancialplanning.com. You can also follow Steve on Facebook, Linked In, Twitter, or blog to get more personal finance advice and tips.



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Posted by LGBT Weekly on May 22, 2014. Filed under The Money Shot. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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