An extraordinary general meeting vote for Toshiba in Japan underlines how passive funds can trip up governance. ESG-conscious fund managers need to minimise such conflicts.
While many investors across Asia are beginning to put more assets into passive funds, some remain reluctant to do so.
Asset owners could evolve their usage of index funds and ETFs by turning to more environmental, social and governance plus fixed-income vehicles, say experts.
Asset owners across Asia Pacific look set to slowly raise the amount of passive investments in their overall portfolios, as they continue to absorb new flows of assets.
The difficult market conditions that the Covid-19 pandemic has created could accelerate an existing trend among asset owners: using passive funds to invest in mainstream assets.
AIA’s Group CIO Mark Konyn believes some investors haven't sufficiently considered the governance trade-offs of private assets, or their illiquidity in tougher times.