Insights | 07.14.20
Client-Centric ESG Investing Needs to Be Active, White Paper Asserts
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.