Passive funds allow investors to track the performance of a market as a whole
Passive investing risks safe haven for fossil fuels
Growth in index-tracking funds over last few years has led to over-investment in fossil fuel sector, says report
Index-tracking funds are in danger of becoming safe havens for investment in fossil fuels, according to a recent report from thinktank Common Wealth. These funds are pools of money for which investment decisions are made based on a pre-determined index, such as the FTSE 100. These ‘passive’ funds allow investors to track the performance of the market as a whole, rather than ‘active’ funds where portfolio managers select particular stocks or products. The market has grown recently, with total assets invested passively having nearly trebled in the past five years alone. A small group of large asset management firms—such as Blackrock, Vanguard, State Street and Fidelity—have pioneered the growt
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