07.14.20
Client-Centric ESG Investing Needs to Be Active, White Paper Asserts
by: Tracey Longo
Advisors who want to deliver environmental, social, and governance (ESG) investments to clients “inherently” need to use active management, according to a new white paper from the Investment Adviser Association's Active Managers Council (AMC). “The traditional fully-active approach allows for a more nuanced consideration of quantitative and qualitative factors, which helps investors tailor their portfolios to their sustainability goals,” AMC says in the paper. “The reality is that passive management is a very blunt instrument when it comes to ESG. They can do a lot of top down analysis, but it is very difficult for them to engage with the 2,000 companies that make up their indices." Active sustainable funds took in $10.8 billion last year, according to data from Morningstar Direct, while passive funds took in $11.1 billion.
Read the full article on Financial Advisor.