Patricia Lizarraga

Patricia Lizarraga has spent 15 years studying a pattern most investors overlook: companies led by women CEOs tend to outperform. Her WCEO ETF , investing exclusively in companies with female chief executives , isn't built on a social thesis (though that exists too). It's built on the observation that the obstacles women face reaching the C-suite function as a natural quality filter: "There has to be a better performer to be able to overcome those obstacles. Think of it like hurdle jumpers."

The Female Factor: Outperformance Through Adversity

Patricia founded Hypatia Capital and began tracking female CEO performance as a client pattern: "I started realizing, wow, I want more female clients, and they're so good at what they do , they're the top performers of my clients." The investment thesis crystallized about seven or eight years ago when she saw a clip from Quantopian, the algorithmic trading platform, where someone had tested a women CEO strategy and found significant alpha.

"That was like a seed planted. What if I could turn this into a real product?" The path from idea to ETF was long , building the database alone was a multi-year effort because the historical data simply didn't exist. "We tried to buy it. We went to different data providers to just try to get the historical list of dates when women were CEOs and when they left. And we had to recreate it from scratch." That proprietary database became the foundation of the WCEO index.

Building on the Best Platform

Patricia chose to launch on a shared trust through Two Roads rather than building her own. The reasoning was strategic focus: "We want to focus on the creation of opportunities for investors to invest in women in leadership. That's what we've been studying for 15 years." Rather than becoming experts in ETF mechanics, they partnered with top-tier service providers , Vident as sub-advisory, Wilshire as calculation agent, Brown Brothers Harriman as custodian , and concentrated on their actual edge: isolating and validating the female factor.

Portfolio Construction: 124 Names, Equally Weighted

The WCEO portfolio holds 124 names, equally weighted, spanning small, medium, and large cap companies. "Because it's equally weighted, it's going to correlate most closely with small cap , that is our benchmark, the FTSE/Russell Small Cap Index." The equal weighting means it won't replace an S&P 500 allocation since it excludes mega caps ("what drives the S&P"), but it can serve as a small-cap allocation with a built-in quality factor.

Patricia notes it could also serve as an overweight position for investors who "want more gender balance" in their portfolio and are willing to take a larger allocation than just small cap. The 124-name, equally-weighted construction provides broad diversification within the theme while avoiding concentration risk in any single name.

The AUM Liquidity Misconception

Like many smaller ETFs, WCEO faces the AUM-liquidity objection from advisors. Patricia addresses it directly: "The ETF is as liquid as its smallest stock. So we are no less risky than a $500 million market cap company." Brad empathizes , THOR ran into the same issue , and confirms it's fundamentally an education problem, not a liquidity problem. The ETF's liquidity is determined by its underlying holdings, not by the fund's AUM.

Inverting the Capital Allocation

Patricia raises a structural argument about capital flows that deserves attention: "You have more money right now going into early-stage female-focused funds than you have going into gender lens products. And that is upside down , in your portfolio allocation, your public investments should be a much larger piece of your portfolio than your early-stage investments."

The implication is that investors interested in gender lens investing are allocating to the wrong part of the capital stack. They're putting money into venture-stage, illiquid, high-risk female-focused funds when they could be allocating to liquid, public-market companies with proven female leadership. WCEO is specifically designed to capture that public-market opportunity.

Whether the female CEO factor persists as a source of alpha is an empirical question that only time will answer. But Patricia's framework , that systemic obstacles create a natural selection filter producing higher-quality leaders , is logically sound and observable in the data she's spent 15 years compiling.

The Hypatia name is a deliberate choice , named after Hypatia of Alexandria, the ancient mathematician and philosopher widely considered one of the first women to make significant contributions to mathematics. It signals the firm's intellectual heritage and commitment to the female leadership thesis. The database Patricia built from scratch, tracking every female CEO appointment and departure across public markets, represents genuine proprietary intellectual property that competitors would need years to replicate. Combined with the Quantopian validation that first planted the seed, the quantitative foundation is stronger than many thematic ETFs that rely primarily on narrative appeal. For advisors serving clients who want their capital to reflect their values without sacrificing returns, the hurdle-jumper thesis gives them something most gender lens products lack: a compelling alpha argument grounded in economic logic, not just social aspiration.

Key Takeaways

• Patricia Lizarraga has spent 15 years studying a pattern most investors overlook: companies led by women CEOs tend to outperform.
• Her WCEO ETF , investing exclusively in companies with female chief executives , isn't built on a social thesis (though that exists too).
• What if I could turn this into a real product?" The path from idea to ETF was long , building the database alone was a multi-year effort because the historical data simply didn't exist.
• The WCEO portfolio holds 124 names, equally weighted, spanning small, medium, and large cap companies.

Listen to the full conversation on Spotify, Apple Podcasts, or YouTube.