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Credit Suisse Launches First-Ever LGBT Equality Index, Portfolio

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Credit Suisse yesterday launched an LGBT Equality Index,  the first index to track the equity performance of companies with LGBT (Lesbian, Gay, Bisexual and Transgender) friendly policies, as well as an LGBT Equality Portfolio available to its banking clients.

SuisseThe WSJ reports, via press release:

The Credit Suisse LGBT Equality Index(TM) is a capitalization-weighted equity index that measures the performance of US companies recognized for supporting and promoting equality for members of the LGBT community. Index inclusion requires a score of 80 or above on the Human Rights Campaign's Corporate Equality Index (CEI.) The HRC Corporate Equality Index is the national benchmark for corporate policies and practices related to LGBT employees. The initial concept for the index is the result of conversations between Credit Suisse and LGBT Capital, a thought leader in the field of LGBT-related socially responsible investment activity.

Credit Suisse is also launching today an associated investable portfolio, the Credit Suisse LGBT Equality Portfolio, Powered by HOLT(R). HOLT is a Credit Suisse proprietary valuation framework with a disciplined cash flow approach to company analysis and stock selection. This new Portfolio is available exclusively to Credit Suisse Private Banking USA clients. It is currently the only investable instrument associated with the index and contains blue chip companies with progressive LGBT policy and strong capital appreciation potential.

Ashley Kindergan at the Financialist explains how was it designed:

“We believe that companies that engage in and have good top-level policies regarding LGBT employees should see a positive bottom-line economic impact as a result,” said Eric Berger, a Relationship Manager for Credit Suisse’s Private Banking USA business and a member of the firm’s LGBT Network, which played a critical role in the product’s development over the course of the last two years...

To design the product, Nicole Douillet, a trader at Credit Suisse who is also the co-chair of the LGBT Network, first put together a market capitalization-weighted index of LGBT-friendly companies based on the HRC’s corporate ranking. In its current iteration, the non-tradable Credit Suisse LGBT Equality Index consists of about 200 companies with a score of 80 or above on the HRC’s Corporate Equality scorecard. All but a few are in the S&P 500.

The next step was to create an investable, optimized instrument. To that end, Credit Suisse’s HOLT team—which evaluates individual companies for clients ranging from hedge funds to wealth managers—selected from a list of LGBT-friendly companies with a score of 80 or above the stocks that they believe are good investment ideas based on more traditional measures.

More at The Financialist....

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Comments

  1. That's awesome! I'm going to have more information now when I go meet with my financial advisor this week, I was planning on switching things up anyway :) Great!!

    Posted by: LucyInDaSky | Oct 22, 2013 9:09:47 AM


  2. FANTASTIC!!

    Posted by: Rad | Oct 22, 2013 9:20:48 AM


  3. I have added the index CSLGBT to my portfolio! This is GREAT! Nice to see a capitalistic view of equality.

    Posted by: Rad | Oct 22, 2013 9:25:08 AM


  4. This is awesome. Now Credit Suisse clients can support companies who support them! Thank you Credit Suisse!

    Posted by: Francis #1 | Oct 22, 2013 1:09:23 PM


  5. I suppose this is good for clients who want to invest in socially conscious businesses but the socialist in me wants to cry when I hear the words "stock portfolio" and "hedge fund" in relation to civil rights and equality. Credit Suisse is profiting from the movement's hard fought success of swaying public opinion with this blatant PR move.

    Posted by: Jack Ford | Oct 22, 2013 1:34:17 PM


  6. I hate to say it, but the line on that chart tracking performance is pretty darn flat.

    Posted by: peterparker | Oct 22, 2013 2:53:00 PM


  7. @PETERPARKER: Not really. In the year shown, the fund went from 145 to 178. As you can see from the number in the lower right, this represents an increase of 22%. Comparatively, the DOW was up about 16%.

    Posted by: Tom L | Oct 22, 2013 3:27:20 PM


  8. Reminds me of Meyers Sheppard Pride Fund.

    Posted by: Randy | Oct 22, 2013 5:48:21 PM


  9. It is true that companies that engage in and have top-level policies regarding LGBT employees should see a positive bottom-line economic impact as a result.

    Posted by: lisabraker | Oct 24, 2013 3:50:26 AM


  10. Not sure if this is cool or not. Seems like a way for us to easily tell if a corporation is anti- or pro(?)-gay. But what if, like Target and Chick-fil-A, a big reason why a boycott was initiated is because of contributions given to anti-gay politicians from the heads of the company, not the company itself. Yes, a company should be boycotted if it is paying a CEO who privately finds anti-gay politicians. But won't this index serve as a way for corporations to shield themselves from our activism when their executives fund our enemies? Won't companies be able to say to the media who too often lazily defer to "standardized metrics" like this one. The companies will be able to use this index as a weapon to attack the integrity of our cause when we attempt to hold them accountable. Wouldn't this have been useful for Chick-fil-A, Target (everyone wants to like Target, and the media could have convinced them to with this imperfect index) or Stoli (who I think was wrongfully demonized, but managed to prove it's case on its own merits without attacking the integrity of its accusers. That must have been much more difficult than just attacking us, and attacking us would have been easier and therefore more attractive given an index which would have made all of these companies look congenial toward us on paper.) It's not as if this Wall Street index will be a beacon of impartiality and virtue. If you want a good rating, pay for it. I don't like this at all.

    Posted by: mododavid | Oct 24, 2013 8:53:26 PM


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