Sage Advisory's 2021 Stewardship Survey Gives High Marks for Diversity, Equity, and Inclusion

Voting practices among ETF sponsors also improved from 2020

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Jul 20, 2021, 10:26 ET

AUSTIN, Texas, July 20, 2021 /PRNewswire/ -- Sage Advisory Services has released its Fourth Annual Sage ETF Stewardship Survey. The survey shows that, among large and small exchange-traded fund (ETF) sponsors, nearly 90% of respondents received the highest possible score in the newly added section focused on diversity, equity, and inclusion (DEI). This is the first year the stewardship report, which examines how ETF sponsors perform their fiduciary duties on behalf of ETF investors, has been broadly released.

The past year saw an increased emphasis on social issues, such as pay equity as well as racial and gender representation within corporations, prompting Sage Advisory Services to include the new section in its annual survey of ETF sponsors. In addition to gathering general information about ETF sponsors, the Fourth Annual Sage ETF Stewardship Survey assessed these six core areas of stewardship:

Voting Practices
Engagement
Stewardship Professionals
Disclosure
Climate Initiatives
Diversity, Equity, and Inclusion

"We added a diversity, equity, and inclusion section not only to ensure our ETF sponsors are set up to foster diversity, equity, and inclusion, but also to verify they have strategies in place to improve upon areas in which they may be lagging behind," said Robert (Bob) G. Smith, CIO and president of Sage Advisory Services. "We are happy to report that 88% of our ETF sponsors received the highest possible score on this section. Clearly, there is more proactive work to be done in this area, and we are encouraged that the vast majority of ETF sponsors recognize the importance this plays in creating a thriving, successful workforce."

In addition, Smith noted that 94% of those surveyed indicated they have resources in place to promote equity at all levels. "Many of them cited programs and initiatives, including recruiting initiatives, reviewing promotions, diversity focus groups, and mentorship programs," he said.

The survey also found that the number of respondents who received a passing grade in voting practices—a key tenet in the practice of stewardship—increased from 64% in 2020 to 71% in 2021.

"We believe good stewardship practices and ESG principles are closely linked because they promote greater transparency and accountability," said Emma Harper, an environmental, social, and corporate governance (ESG) research analyst at Sage and survey author. "Good stewardship also fosters a culture of responsibility, and it seeks the alignment of stakeholder interests to secure and increase long-term capital value."

Last year, Sage Advisory Services studied the relationship between voting and engagement and found that, although ETF sponsors claimed to value ESG issues, the voting records of many did not reflect that support. Harper said this has changed since the last survey.

"Many ETF sponsors specifically focused on their voting records and showcased their commitment to supporting proposals that had a positive impact on ESG factors," Harper added. "This was especially notable with climate voting proposals."

Methodology
Sage received responses from 17 ETF sponsors, including 5 new and 12 returning participants. The survey assessed the six core areas of stewardship based on responses to 36 questions. Collectively, the participating respondents manage $24 trillion in assets, of which $3.7 trillion are ETF assets. This represents about 58% of the U.S. ETF market and 86% of the U.S. ESG ETF market.

The full report can be accessed here: https://www.sageadvisory.com/perspectives/2021-annual-etf-stewardship-survey/

About Sage Advisory Services
Sage is an independent investment management firm headquartered in Austin, Texas, that serves the institutional and private client marketplace with traditional fixed-income asset management, ESG-integrated portfolios, global tactical ETF strategies, and liability-driven investment solutions. As of March 2021, Sage manages and advises over $16 billion in client assets. For more information, visit sageadvisory.com.

SOURCE Sage Advisory Services