TOKYO (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 Management said.
Hiroshi Ozeki said a recovery to pre-pandemic levels will be difficult for some industries such as restaurants, airlines and train operators.
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 firm.
“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 recent years.
“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 neutrality.
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 investors.
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(Reporting by Hideyuki Sano in Tokyo and Tomo Uetake in Sydney; Editing by Stephen Coates)
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.