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* Shares of companies with high ESG scores doing very well
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TOKYO, Dec 1 (Reuters) - Social transformations triggered by
the coronavirus pandemic are making index-following, passive
stock investments less attractive and could reverse a decline in
active stock investments, the chief executive of Nissay Asset
Hiroshi Ozeki said a recovery to pre-pandemic levels will be
difficult for some industries such as restaurants, airlines and
Energy-intensive sectors also would be pressured by the need
to deal with climate change, he added.
"Even after the pandemic is over and even with some
government help, they won't return to where they were," said the
chief of the 13 trillion yen ($125 billion) asset management
"Up until now, passive style has been a vogue - it's been
said to be the most efficient investment. But with that, you are
automatically putting your money in those industries with no
growth stories," he said.
Assets held by exchange traded funds (ETFs), among the most
convenient passive investments, have been increasing globally
over the last decade.
In contrast, active funds, which try to aim for higher
returns based on stock picking, have seen large outflows in
"In the coming few years, active investments are likely to
outperform passive ones. The era of active investment may be
back," Ozeki said.
Companies which Nissay scores highly for Environment, Social
and Governance (ESG) had done better this year, he said.
Enterprises poised to benefit from the shift to renewable
energy would prosper after the United States and Japan join
other countries in adopting ambitious targets to achieve carbon
U.S. President-elect Joe Biden has committed to net zero
emissions by 2050 and Japanese Prime Minister Yoshihide Suga in
October set the same goal for Japan.
"Some companies that have committed to 100% renewable power
targets, such as Sony and Ricoh, are saying
that Japan is now becoming the bottleneck among the developed
world in achieving that goal," he said, citing limited
availability and high costs of renewable energy.
"So it means a lot that Suga has made that target. For
investors, too, it reduces risk when the government clarifies
its long-term goal," Ozeki said.
Ozeki also said for next year he expected:
* Global share prices to rally further as the pandemic lasts
longer than expected, forcing policymakers to continue to
support the economy through monetary and fiscal measures.
* Short-term U.S. interest rates to stay low, making
currency-hedged dollar bond investments attractive for Japanese
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(Reporting by Hideyuki Sano in Tokyo and Tomo Uetake in Sydney;
Editing by Stephen Coates)