The Hypatia Women CEO ETF (WCEO) is outperforming the S&P 500 this year, with a nearly 20% return driven by companies led by female chief executives. The ETF, which invests exclusively in women-run businesses, highlights a growing trend of strong performance from these companies, exemplified by leaders like AMD’s Lisa Su and Citigroup’s Jane Fraser.
This success comes as the market diversifies beyond mega-cap tech firms, showcasing the financial acumen of women in top leadership roles despite their underrepresentation in Fortune 500 companies.
A significant trend is reshaping the stock market landscape: companies helmed by women are demonstrating remarkable growth. The Hypatia Women CEO ETF (WCEO), launched in January 2023, recently reached an all-time high of $40.14. This $10 million fund, exclusively investing in companies with female chief executives, has achieved nearly a 20% return in 2026 as of midday Thursday, significantly outperforming the S&P 500's less than 13% gain.
Patricia Lizarraga, managing partner of Hypatia Capital and founder of the WCEO ETF, noted, "This year, as this diversification away from the Mag Seven happens, we're doing extremely well." The market's recent broadening, after years of dominance by a few mega-cap tech firms traditionally led by men, is benefiting the WCEO. The ETF's largest holding is Advanced Micro Devices, led by CEO Lisa Su, which boasts a market value of $786 billion and has seen its stock more than double this year, soaring 129%.
"There's been this incredible performance of the hyperscalers for the last few years," Lizarraga explained. "But our proof is in diversification. The truth of the matter is, there are no women hyperscalers." The WCEO ETF requires its holdings to have a market capitalization of at least $500 million and benchmarks against the S&P SmallCap 600, which Lizarraga states the WCEO has outperformed since its inception, prior to fees.
Hypatia Capital stands out as the only entity globally that continuously tracks the performance of women in CEO positions. "We are not cherry picking our women. We are putting the great performers in there, and the poor performers in there," Lizarraga asserted. The ETF's strategy focuses on capturing the performance of women leaders, regardless of their company's current standing.
Beyond stock performance, women CEOs are proving their mettle in leadership. An analysis by Hypatia revealed that when a woman takes the helm of a company whose stock dropped the previous year, they successfully turn the situation around two out of three times. Lizarraga believes, "All things being equal, women CEOs will outperform because it's harder for them to get there."
A prime example is Citigroup CEO Jane Fraser, the first woman to lead a major Wall Street bank. Since taking over in 2021, Fraser has revitalized the struggling bank by streamlining its global operations and divesting unprofitable units. Citigroup's stock price has nearly doubled, rising from $69.54 on March 1, 2020, to $137.64 as of Wednesday's close. Fraser's leadership was recognized when she was named to Fortune's "Most Powerful Women" list.
Similarly, General Motors CEO Mary Barra is celebrated for her transformative leadership. Since becoming CEO in January 2014, she has reshaped the automotive giant into a more focused and profitable enterprise. GM's stock has surged 126% under her tenure, climbing from $39.38 to $89.16 by Wednesday's close.
Despite these successes, women still only lead 11% of Fortune 500 companies. The Hypatia ETF, though small, has grown from $1 million in assets at its launch. Its holdings are equally weighted to mitigate company-size bias and sector weights are matched to its benchmark to eliminate industry bias, thereby isolating the "female factor." If a sector has fewer women-led companies, those stocks receive a larger weighting, and vice versa for sectors like health care where women are more prevalent.
The fund rebalances monthly to ensure all companies remain women-led. A company is removed if a man becomes CEO, and added if a woman takes the position. Lizarraga hopes the WCEO ETF will also play a role in promoting more women into C-suite positions. "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 stated. Increased distribution is key to the ETF's growth and influence.
