Why active vs passive is the wrong debate
Approaches to management aren’t ‘black and white, but involve shades of grey’
Approaches to management aren’t ‘black and white, but involve shades of grey’
But excluding oil, autos, conventional power and airlines would lead to higher tracking error
Industry views diverge on how investors can best shield themselves from market volatility
Firm will offer financial planning solutions and advice to investors
Low fees and no commission stopping advisers from recommending passives
Cheapest US equity funds have produced better returns compared to pricier active peers, according to Morningstar
Blackrock’s iShares has fended off Vanguard to retain the top spot in FE’s latest Passive Crown ratings list.
Fund selectors have been lured to passive strategies in emerging markets over the past 12 months after soaring technology stocks have driven the growth index sky high.
The asset management industry is split on the market implications if passives continue to rake in inflows, while investors lose faith in active management.
Fidelity International has stepped up the passives price war with the launch of six low cost cross-border equity index funds and the reduction of pricing on three existing UK-domiciled index funds.
As cumulative flows into emerging market passive funds surpass active alternatives investors should seek opportunities further down the market-cap scale, Aviva Investors head of emerging markets and Asia Pacific Will Ballard argues.
Passive investors pay scant regard to the fundamentals of individual securities and free-ride on the work of active investors with implications for financial stability, price discovery and index correlation, according to a paper from the Bank of International Settlements.