ESG ETFs Can Also Focus on Companies with Strong Financial Performance | Page 2 of 2 | ETF Trends

Cea also pointed out that during 2017, 37% of large-cap U.S. stock funds with “above average” or “high” sustainability scores in Morningstar’s database outperformed the S&P 500 index, which has an “average” sustainability rating, compared with just 28% of conventional large-cap funds. Furthermore, according to Barron’s analysis, 25% of comparable sustainable funds beat the index compared with 12% for large-cap U.S. stock funds over 2016.

UBS has come out with its own ESG-related ETF theme to help investors better diversify their portfolios. The InsightShares LGBT Employment Equality ETF (NYSEArca: PRID) is among a new breed of socially responsible investments and includes large- and mid-capitalization U.S. stocks of companies with workplaces that promote and provide equality for lesbian, gay, bisexual and transgender, or LGBT, employees based on their score in the Human Rights Campaign Foundation’s Corporate Equality Index.

Cea argued that companies suffer when diversity is ignored. Looking at the overall business impact, employee engagement suffered by up to 30% due to unwelcoming environments. LGBT workers reported negatively on productivity, engagement with coworkers and overall sentiments about their jobs when they feel they are experiencing a negative workplace environment or are feeling compelled to be closeted.

As a way to better screen for LGBT friendly companies, UBS InsightShares looked to the Human Rights Campaign Foundation’s Corporate Equality Index, which scores companies based on screens like non-discrimination policies across business entities, equitable benefits for LGBTQ workers and their families, internal education and accountability metrics to promote LGBTQ inclusion competency and public commitment to LGBTQ Equality.

Financial advisors who are interested in learning more about environmental, social and governance-related investment strategies can watch the webcast here on demand.