Passive Fund Providers Step Up Stewardship Efforts

Unlike active managers, index managers can't sell poorly run companies. But putting up with poor governance is no longer an option

Hortense Bioy, CFA 11 December, 2017 | 11:13AM Alex Bryan

Boardroom

Index trackers and ETFs now account for nearly 25% of all assets under management, meaning the largest providers are becoming increasingly influential. Often ranking among the largest investors of public companies, they are the ultimate long-term shareholders of listed companies.

They have the power to effect change through voting and engagement – as well as improving investment performance. Despite this, little research has been done to understand how index managers conduct their stewardship.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Amundi SA70.95 EUR0.21
BlackRock Inc557.61 USD1.53
Charles Schwab Corp34.43 USD1.59
Exxon Mobil Corp43.14 USD-0.23
UBS Group AG11.87 USD1.37

About Author

Hortense Bioy, CFA

Hortense Bioy, CFA  is director of passive funds and sustainability research in Europe for Morningstar

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