Influence of the growing ETF industry on active investor relations work 61Influence of the ETF industry on IR work Contact to passive investors could as already briefly mentioned above be made possible via regulations These could require ETF providers to allow a certain type of contact with companies in particular with IR departments Currently the whole topic around ETFs and passive investors is seen as kind of a black box due to a lack of trans parency and information as well as no possibil ity to get in touch with those experts Therefore providers of passive products could be obliged via regulations to provide and hanging out certain information so that more transparency is ensured not only for IR but for the entire brokerage However it might take some time before such regulations and supervisory measures come into force In the meantime trying to get in contact with investors who do not trade purely passive vehicles could be an option for IR Those professionals who actively compose a basket based on self defined criteria and who then select the company see chapter 2 2 3 3 for active ETFs are more willing to engage with IR Such an engagement could provide IR with the opportunity to better under stand the mechanisms of passive and passive ac tive investment products Moreover information on what kind of selection criteria mostly play a role not only for indices but in that case for active ETFs could be obtained Thus an engagement with non ETF based passive investors using the buy and hold strategy is more likely to happen since they are more open to interact with management Once bought into an investment thesis they tend to stay invested for the long run resulting in a more stable share price Yin and Barientos 2019 Targeting of active investors Regardless of whether and especially to what extent targeting of passive investors will become a major task for IR in the future targeting of active investors will still be relevant A reduction in time intensity is only estimated by the minority 15 of the respondents In general the way of reach ing out to investors and staying in contact with them has changed over the last years Video con ferences now make it possible to meet at relatively short notice IR experts do not have to fly around the globe to meet investors for an update call This allows investors to approach IR quite spontaneously and to request a meeting The trend towards more video conferencing and virtual meetings has been accelerated by the Covid 19 crisis In the future it is assumed that contact to investors will remain more virtual and that less travel will be necessary than it was the case before the Covid 19 crisis Yet this does not mean that these contacts will become less important Rather the opposite will be the case the number of companies listed on stock exchanges increases worldwide except for Germany where a contrary movement can be observed Resulting from this more companies compete for investors and a decreasing number of active portfolio managers trying to get their atten tion Expert interview 1 2021 see annex 3 In order to profit from trading liquidity an improved targeting of active investors is necessary as the proportion of passive shareholders increases Yin and Barientos 2019 Some experts suspect that the time IR spends on classic investor targeting could even increase as a decrease in the num ber of fund managers could mean more research effort for IR to find out which investors could be interesting for the company However this would be somewhat contrary to the original conviction that if investors are using their tools wisely and put in the right numbers into their systems they will come across the companies that are relevant to them of their own accord Expert interview 1 2021 see annex 3 Regardless of whether active targeting becomes more time consuming or not for the reasons just mentioned intensive prepara tion for meetings with existing or potential inves tors will still be of utmost relevance for IR The fact that classic investor targeting remains important is also reflected in the opinion of the respondents according to the survey a clear majority of 95 do not see the contact with actively managed funds or buy side analysts as being at risk Nonetheless

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