Voting issues remain with US ETFs

This week, Gill Wadsworth took a look at the 2023 Sage Advisory ETF Stewardship Survey which reported that ETF providers continue to overlook stewardship responsibilities with proxy voting "muddled and concentrated".

The Sage Advisory Services 2023 ETF Stewardship Survey, which covers 19 ETF providers that collectively oversee more than USD28 trillion in assets, finds the commitment among ETF issuers to providing proxy voting "is fading", with 31 per cent of respondents seeing a decline in their participation scores.

Bob Smith, President of Sage Advisory, said: "Using our proprietary scoring system, 50 per cent of repeat participants saw a notable improvement in their overall stewardship score, while 31 per cent saw a decline. Clearly, this is an industry in growth mode but one that has not yet aligned around best practices when it comes to stewardship."

Emma Harper, Vice President, Sage Senior Research Analyst and author of the report said: "While the industry’s growth and innovation are commendable, how these assets are managed from a stewardship perspective is a critical, and too often overlooked, aspect of monitoring the space."

She added that all ETF investors need to be aware of the importance of proxy voting calling it a "critical aspect of stock ownership".

"It is the duty of the ETF provider to exercise these rights in the best interest of a fund and its shareholders."

Fixed income ETPs dominated October’s figures according to BlackRock data this month. Equity flows fell from USD52.7 billion in September to USD34.3 billion in October, while fixed income (FI) buying almost doubled from USD15.5 billion to USD30 billion, the firm reports.

Beverly Chandler, Managing Editor

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