New York-based ETF sponsor Global X Funds has launched the Global X Founder-Run Companies ETF (BOSS). Tracking the Solactive US Founder-Run Companies Index, BOSS will hold a basket primarily consisting of US large and mid-cap companies led by CEOs who are the original founders of their firms.
The fund will be the fourth in Global X’s ‘Alpha’ suite of funds, designed with the aim of delivering market-beating returns. The founder/CEOs of companies currently held in BOSS boast 10 times higher equity ownership in their companies than the average S&P 500 CEO. Further, in-depth studies have concluded that founder/CEOs instill an owner’s mindset in their firms, which consists of a unique set of core practices, values, and attitudes that can positively influence their company’s success over the long term.
“Bringing BOSS to market reinforces our goal of providing unique solutions for investors that are based on academic research and sound index construction,” says Alex Ashby, director of product development at Global X. “Founders bring a unique vision and innovative culture to their companies that we believe will translate into more sustainable long-term growth.”
High equity ownership, bolstered by an emotional attachment to a company they have grown from the start, may cause founder/CEOs to take a longer term view of growing their businesses. For example, these companies tend to avoid excess indebtedness, averaging 52 per cent lower debt-to-equity ratios than the average S&P 500 company.