Allowing passive investors to take a more active approach to ownership. The majority of our FGR funds now incorporate engagement.
Passive funds – portfolios designed to replicate, or "passively track," an index – have gained in popularity in recent years. Yet, many passive investors might not realize that they can have an active voice in how the companies in which their funds invest are managed.
With more than $6 trillion invested passively around the world, there are a lot of shareholders – and they have the potential to be a loud voice.
And this is where an experienced investment manager can help ensure your voice is heard.
By carefully monitoring company strategy and financials, as well as performance around environmental, social and governance issues, your fund's manager can work to encourage companies to make changes where deemed necessary. In many ways, this can be more powerful than simply choosing not to invest in an organization.
At Northern Trust, we believe an active owner is an effective owner. Owners can engage in a number of ways, including:
Meeting with company representatives
Holding discussions with other shareholders of the company
Participating in collaborative investor initiatives
Submitting shareholder resolutions at general meetings, as appropriate
We believe the long-term financial success of our clients and shareholders is dependent upon a healthy global environment, a stable society and well-functioning companies. By engaging on behalf of our investors, we can help make changes to organizations to promote a positive, long-term approach, one that is better for financial performance, and better for society as a whole.?
Through active ownership and engagement, investors have persuaded numerous publicly held companies to:
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