Although most asset owners recognize the need to increase investment diversity, they often believe it comes at the risk of reduced financial performance. To better understand how asset owners incorporate diversity into their investment priorities and selection of external managers, Morgan Stanley conducted an inaugural poll of large U.S. asset owners. Researchers reported four key findings.

1. Diversity is a top priority for investment decisions. Asset owners recognize the importance and impact of incorporating diversity into investment decisions, with diversity and inclusion becoming an even higher priority over the last year.

D&I is the top ESG factor that asset owners consider for their organizations' investment decisions, and 89 percent of asset owners say that the diversity of external managers is important or a top priority.