Hermes' Steel: ESG integration is the ticket to proper active management and defending market share

'Sell on value, rather than cost'

Hermes Investment Management's integration of ESG (environmental, social and governance) into the group's mainstream investment strategies will help it defend market share in an industry that is being increasingly challenged by growing passive players, according to global head of business development Harriet Steel.

Active fund houses have seen their market share shrink over the past decade, as passive providers  grow in popularity, with many predicting this trend will continue gathering pace.  This year, ratings agency Moody's predicted passives will overtake active funds' share of the US market by 2024, while the latest Investment Association stats showed tracker funds' overall share of the industry's FUM was 13.6% in September, growing from 12.8% the year before. The next ESG? 'Diversity becomes increasing part of manager selection' Steel commented: "There is a very low dispersion around [f...