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Active vs Passive Management and Stewardship

by Nigel Kendall

So-called “Passive” investment funds, which follow the markets rather than invest actively in companies, are growing in number. But are they really “passive” owners? Research suggests otherwise. We look at the data and whether, as stewards, they can and do influence corporate governance and performance in their investee companies.


We have remarked in earlier articles about the limitations of the campaign to improve stewardship by investing institutions. The argument is that investors, as owners, should play their part in holding management to account for the success of the business in achieving its goals. The criticism is that fund managers prefer to do what used to be called “the Wall Street Walk” and sell their holdings at the first…

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