Are ESG regulatory and policy measures driving asset allocation to Passive?

The rapid rise of passive investment is one of the most prominent phenomena of this century. Critics have long argued that this is largely due to central banks’ excess liquidity in the wake of the 2008 global financial crisis. Once that excess liquidity disappears, as has happened in a striking way in the last two years, the passive investment train will stop working.

Following the poor performance of ESG investments in the 2022 bear market, ESG naysayers appear to be ignoring the latest regulatory and policy push, which aims to improve existing standards and elevate ESG as a compensated risk factor in investment portfolios.  These regulatory and policy measures are likely to have a significant impact on investors’ asset allocation and the use of passive vehicles.

In this context, Amin Rajan, CEO of CREATE Research, and Sebastian Schiele, Global Head of Xtrackers Mandates & Solutions Sales at Xtrackers by DWS, will elucidate the conclusions of the recently published Passive Investing Report 2024 Are ESG regulatory and policy measures driving asset allocation?

156 pension plans participated in the survey. They have provided actionable insights into how investors are reacting to an increasing number of ESG-related regulatory and policy initiatives through their asset allocation. The survey, conducted by CREATE Research, is sponsored by Xtrackers.

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