One ETF is handily outperforming the S&P 500 this year. All the stocks in it are run by women
There’s a notable trend underway in the stock market — companies led by women are surging ahead. The Hypatia Women CEO ETF (WCEO), which launched in January 2023, hit an all-time high of $40.14 on Thursday. The $10 million fund, which solely owns companies led by female chief executives, has gained almost 20% in 2026 through midday Thursday, above the less than 13% return in the S & P 500 . “This year, as this diversification away from the Mag Seven happens, we’re doing extremely well,” said Patricia Lizarraga, managing partner of Hypatia Capital and founder and chief investment officer of the ETF. WCEO .SPX YTD line Hypatia Women CEO ETF vs. S & P 500 year to date The market has started to broaden out after years of soaring gains by a small number of mega-cap technology companies, all run by men. The largest company in WCEO is Advanced Micro Devices , run by CEO Lisa Su, with a market value of $786 billion. The chip giant has more than doubled this year, soaring 129%. “There’s been this incredible performance of the hyperscalers for the last few years,” Lizarraga said. “But our proof is in diversification. The truth of the matter is, there are no women hyperscalers.” The ETF’s holdings must have a market cap of at least $500 million and its benchmarked against the S & P SmallCap 600 , which Lizarraga said WCEO has outperformed since inception, before fees. “Hypatia is the only company that we know of in the world that measures the performance of women in the CEO spot continuously,” she said. “We are not cherry picking our women. We are putting the great performers in there, and the poor performers in there.” Here are WCEO’s top 10 holdings. Power of women CEOs Stock performance aside, women chief executives are already excelling in their management roles in a trend Lizarraga first noticed about 20 years ago. In fact, an analysis by Hypatia found that when women are given the top spot at a company that has seen its stock drop the prior year, two out of three times they turn it around, she noted. “All things being equal, women CEOs will outperform because it’s harder for them to get there,” Lizarraga said. A case in point is Citigroup CEO Jane Fraser , the first woman CEO of a major Wall Street bank when she took the helm in 2021. Fraser turned around the struggling bank by paring back its global footprint and cutting unprofitable units. Citigroup closed Wednesday at $137.64, almost double the $69.54 price on March 1, 2020, when Fraser took over. In May, Fraser was named to the top spot on Fortune’s ” Most Powerful Women ” list. She recently told London’s Financial News, “I’m not ruthless, but I’m damn tough.” General Motors CEO Mary Barra is also famous for a turnaround. She rose to the top spot at the nation’s largest automaker in January 2014, transforming the maker of Cadillacs and Chevrolets into a smaller, more profitable business . GM has climbed 126% to $89.16 at Wednesday’s close from $39.38 the day Barra took the reins. For all their success, only 11% of Fortune 500 companies are led by women CEOs. Isolating the ‘female factor’ The Hypatia ETF is still small, but has grown from about $1 million in assets when it debuted. The stocks are equally weighted to remove company-size bias. It also matches sector weights to its benchmark to eliminate industry bias — all while isolating the “female factor,” Lizarraga said. That means if a sector, like energy, has fewer women-led companies than another, the stocks get a bigger weighting. The opposite happens for those sectors, such as health care, where women are over-represented. In addition, the fund rebalances every month to ensure that the companies remain women-run. If a man takes over as CEO, it is removed from the ETF and if a woman takes over, it is added. Lizarraga hopes WCEO will also contribute to another important outcome — getting more women to the C-suite “As more board members understand that women deliver more performance with less risk, there will be more women on short lists. There will be more women that are chosen to the CEO spot,” she said. That means the ETF needs to grow, she said. The biggest challenge it faces is distribution, as it is not available through all brokerages, Lizarraga said. “There are 26,000 public company board directors in the United States,” she said. “The way for us to get to all those 26,000 people is to be bigger.”
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