ESG ETFs 'not the right tool' for positive impact

Passive products have 'significant limitations'

Exchange-traded funds (ETFs) and passive products are "not the right tool" to achieve both financial and positive impact return, according to Fred Kooij, chief investment officer at Tribe Impact Capital.

With 45% of actively managed UK equity funds underperforming the S&P UK BMI benchmark year to date, according to a recent Spiva report, it is difficult to pick the right active managers and justify their fees, Kooij said, making it "understandable" that retail investors turn to ETFs. Big tech and ESG: Index giants falling short on standards However, the CIO detailed key factors which investors seeking effective ESG and impact portfolios need to consider before relying on passive products, including "blind index tracking". "As it currently stands, passive strategies typically replic...