The majority of pension funds now view passive investments as a mature part of their portfolio, according to a DWS sponsored report.
The analysis, conducted by consultants CREATE-Research, came from a survey of over 150 pension plans globally, responsible for approximately EUR 2.9 trillion in assets under management. Sixty-six percent of pension fund managers surveyed regard passive investments as an established, mature part of their portfolio. The report also found that:
- The average pension fund surveyed holds 32% of its investments in passives products or solutions, in the form of either index funds, passive mandates or exchange-traded funds (ETFs).
- Amongst passive investors, there is a shift from market capitalisation-weighted indices towards smart beta, factor-based, ESG (environmental, social and governance) and other thematic strategies.
- Almost 50% of pension funds plan to increase their passive ESG allocations by more than 5% of assets under management.
- Only 10% of survey respondents expect passive investments to replace active, with the majority expecting both to co-exist in pension portfolios.
Thorsten Michalik, DWS’s Co-Head of Global Coverage Group and Regional Head of Asset Management, EMEA, commented: “Over the last decade we have seen a fundamental reshaping of asset management, with some strategies becoming standardised and made easily accessible at low cost, which means investors today have an unprecedented level of choice to help them meet their asset allocation goals. It is our job at DWS to facilitate that choice and provide market-leading products and solutions for our clients. ”
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DWS Group GmbH & Co. KGaA (DWS) is one of the world's leading asset managers with EUR676bn of assets under management (as of 31 Mar 2018). Building on more than 60 years of experience and a reputation for excellence in Germany and across Europe, DWS has come to be recognized by clients globally as a trusted source for integrated investment solutions, stability and innovation across a full spectrum of investment disciplines.
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