Blue Ridge ESOP Associates Industry News

NCEO Employee Ownership Index Doubles S&P Performance for Its First Year

Posted by NCEO

Jul 5, 2018 3:17:44 PM

NCEO WebinarsOn June 19, 2017, the NCEO created the Employee Ownership Index, an index of 28 publicly traded companies that had both broad-based employee ownership and had won one of three major national employer rating awards, each of which puts a high emphasis on employee engagement (Fortune's Best Companies to Work for, the Gallup Engagement Index, and the Enterprise Engagement Alliance awards). Broad-based employee ownership included ESOPs where there was an average account balance of $30,000 or more and companies that provided equity grants to most or all full-time employees.

For the first year, the Employee Ownership Index has a 30.3% return; the S&P 500 had a 15.5% return. The index was expanded to 30 companies this June.

Research has overwhelmingly shown that companies that have broad-based ownership and high employee involvement in work-level decisions outperform other companies. This is the first time, however, that an index has been created that people can invest in.

The fund is available at Motif, an online trading platform that allows users to create their own "motif," or basket of stocks, to invest in. Investors can make a motif an option for other users to buy. When you buy a "motif," you are not buying a fund but rather are investing in all the stocks and/or ETFs that make up that motif. If you want to invest in the Employee Ownership Index, you need to go to the Motif website and open an account. Once you have done that, you can trade the Employee Ownership Index. Full disclosure: the NCEO receives a nominal ($1) commission on each trade.

(Article originally published by NCEO - Employee Ownership Update 07/02/18)

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