‘Return on Character’ ETF Encourages Businesses to Invest in Leader Character

Last week, ROC Investments, a California-based investment boutique, launched a new ETF that puts leader character at the center of it’s portfolio. Companies included in the ETF were selected exclusively based on the behaviour of their CEO and executive team. This ETF underscores an important trend sweeping through economic and political spheres: leader character is being increasingly valued. In this blog we’ll take a look at the importance of leader character, how ROC Investment’s new ETF promotes leader character, and how you can begin building your leader character – and the character of your leaders – today.

Why Leader Character Matters

Historically, leaders have been judged by the outcome of their work. Most, however, were not held accountable for the means by which they accomplished that work. Over the past few decades, this has been changing. Increasing attention is being given to leader character; how individuals conduct themselves both on- and off-the-job. And not just because it “makes the world a better place.” Leader character has tangible benefits for organizations, individuals, and teams. Studies have shown that leader character is linked to better judgement and stronger drive.[i] Leaders who score high on integrity also demonstrate increased workplace performance,[ii] and their direct reports show stronger trust and job satisfaction.[iii] Good leadership is essential for the success of any business, but it will also have a positive ripple-effect among employees, clients, and other stakeholders as well. ROC Investments knew this. That’s why they decided to launch an ETF targeting companies with CEOs considered to have strong moral character. This was done in an effort to reward leader character, and encourage others to invest in it, as well as to push businesses’ focus beyond monetary shareholder returns and toward the benefit of robust morals and people who stand by their values.

About the ROC ETF

Before creating the ROC ETF, ROC Investments began by defining leader character. To do this, they created a model for character that consists of four pillars:[iv]

  1. Integrity
  2. Responsibility
  3. Forgiveness
  4. Compassion

These principles of character are what “parents seek to instill in their children,” says Dan Cooper, Founder and CEO of ROC investments. “And yet they are often found lacking in the financial world. Far more than exterior characteristics like education, tenure, politics, age, industry or religion, it is these interior traits that determine character. Our hope is that the ROC ETF will show that not only does character matter, but it is the best way to live and invest”[v]

The ROC ETF is an actively managed fund, listed on the Cboe BZX Exchange. It has an expense ratio of 0.49%,[vi] and will be weighted to mirror returns typical of traditional broad-based US securities. [vii] The ETF will hold approximately 75-100 stocks, selected based on their leader’s Composite Character Scores, which will be updated annually.[viii]

Build Your Leader Character Today

If you’re interested in learning more about leader character, check out SIGMA’s Leadership Character Insight Assessment (LCIA). This test was specifically designed to measure the key dimensions of leader character. Each assessment comes with a personalized report that provides an analyses of your scores, next steps for development, and helpful resources for further education.

If you’re looking for more support in developing leader character, take a look at SIGMA’s individual and group coaching, and our Lunch and Learn Series. If you have any questions, or would like to speak with a consultant, contact us today. We would love to support you on your leadership development journey, and we are always happy to chat!

Erica Sutherland, Ph.D.

SENIOR CONSULTANT & EXECUTIVE COACH

Erica completed her Ph.D. in Industrial-Organizational psychology at Western University. She is a Senior Consultant at SIGMA, where she delivers consulting services and Succession Planning solutions to clients. As a member of SIGMA’s executive coaching team, Erica works one-on-one with leaders to develop talent. She also brings her expertise in measurement and psychometrics to the R&D team, assisting with the development and validation of SIGMA’s many assessments.

Consultant

Brittney Anderson, Ph.D.

LEADERSHIP CONSULTANT & EXECUTIVE COACH

Brittney is a member of our coaching and consulting team. She brings her expertise in evidence-based practice to provide companies with leadership solutions that meet their needs. Primarily, Brittney helps her clients prepare for their future with succession planning and comprehensive leadership development programs. As an executive coach, she helps leaders hone their skills using a process-based approach to development.

consultant

Glen Harrison

VICE PRESIDENT

Glen oversees SIGMA’s sales and marketing activities. As a skilled presenter and trainer, he has designed and delivered engaging and entertaining workshops and webinars to help leaders and HR professionals enhance their understanding of how our products and services can be used to realize potential within their organizations.
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[i] Monzani, L., Seijts, G. H., & Crossan, M. M. (2021). Character matters: The network structure of leader character and its relation to follower positive outcomes. PloS one16(9), e0255940. https://doi.org/10.1371/journal.pone.0255940.

[ii] Johnson, M. K., Rowatt, W. C., & Petrini, L. (2011). A new trait on the market: Honesty- Humility as a unique predictor of job performance ratings. Personality and Individual Differences50, 857-862.

[iii] Palanski, M. E., & Yammarino, F. J. (2011). Impact of behavioral integrity on follower job performance: A three-study examination. The Leadership Quarterly, 22, 765-786.

[iv] Businesswire. (March 24, 2022). ROC Investment Launches World’s First ‘Return on Character®” ETF. Retrieved from https://www.businesswire.com/news/home/20220324005096/en/ROC-Investments-Launches-the-World%E2%80%99s-First-%E2%80%98Return-On-Character%C2%AE%E2%80%99-ETF.

[v] Businesswire. (March 24, 2022). ROC Investment Launches World’s First ‘Return on Character®” ETF. Retrieved from https://www.businesswire.com/news/home/20220324005096/en/ROC-Investments-Launches-the-World%E2%80%99s-First-%E2%80%98Return-On-Character%C2%AE%E2%80%99-ETF.

[vi] Lord, J. (March 29, 2022). ROC Investments debuts ‘Return On Character’ ETF. ETF Strategy. Retrieved from https://www.etfstrategy.com/roc-investments-debuts-return-on-character-etf-10339/.

[vii] Businesswire. (March 24, 2022). ROC Investment Launches World’s First ‘Return on Character®” ETF. Retrieved from https://www.businesswire.com/news/home/20220324005096/en/ROC-Investments-Launches-the-World%E2%80%99s-First-%E2%80%98Return-On-Character%C2%AE%E2%80%99-ETF.

[viii] Businesswire. (March 24, 2022). ROC Investment Launches World’s First ‘Return on Character®” ETF. Retrieved from https://www.businesswire.com/news/home/20220324005096/en/ROC-Investments-Launches-the-World%E2%80%99s-First-%E2%80%98Return-On-Character%C2%AE%E2%80%99-ETF.