It is family offices in particular that currently prefer passive equity funds to active managers, with the cost quota cited as one of the main reasons. According to a recent Scope analysis, only a small proportion of actively managed funds will pay off in the long term – but investors will benefit even more from an efficiently and successfully managed investment fund. Although, the investment region is a key factor to be taken into account here…
Active vs. Passive Equity Management? Advantages are not always obvious
Active or passive equity fund management is currently being discussed, especially in the family office segment, but also among other investors. On the one hand, the costs of passive management are lower, but on the other hand, the question arises as to the relative additional performance of active management. According to a Scope analysis, only a small proportion of actively managed funds are able to beat the benchmark index of their peer group, even over the long term – but if this is the case, then it is all the more worthwhile. This advocates intelligent and efficient fund selection by the fund manager, which has recently become increasingly demanding due to the variety and number of products.
Moreover, active management pays off more in some regions than in others. The former clearly include Asia and the emerging markets, including Latin America in particular – fund strategies that we focus on at Natango. Globally, passive funds have done well over the past decade. For this decade, however, we expect higher volatility, structural changes in the interest rate environment and transformation processes, especially in the tech, biotech and healthcare sectors. This is difficult for an ETF to reflect.
Click here for the Scope analysis:
https://www.scopeexplorer.com/files/get/?name=news.ReportFile/bytes/filename/mimetype/ScopeExplorer_Aktiv_versus_Passiv_2021_Feb.pdf
It is family offices in particular that currently prefer passive equity funds to active managers, with the cost quota cited as one of the main reasons. According to a recent Scope analysis, only a small proportion of actively managed funds will pay off in the long term – but investors will benefit even more from an efficiently and successfully managed investment fund. Although, the investment region is a key factor to be taken into account here…
Active vs. Passive Equity Management? Advantages are not always obvious
Active or passive equity fund management is currently being discussed, especially in the family office segment, but also among other investors. On the one hand, the costs of passive management are lower, but on the other hand, the question arises as to the relative additional performance of active management. According to a Scope analysis, only a small proportion of actively managed funds are able to beat the benchmark index of their peer group, even over the long term – but if this is the case, then it is all the more worthwhile. This advocates intelligent and efficient fund selection by the fund manager, which has recently become increasingly demanding due to the variety and number of products.
Moreover, active management pays off more in some regions than in others. The former clearly include Asia and the emerging markets, including Latin America in particular – fund strategies that we focus on at Natango. Globally, passive funds have done well over the past decade. For this decade, however, we expect higher volatility, structural changes in the interest rate environment and transformation processes, especially in the tech, biotech and healthcare sectors. This is difficult for an ETF to reflect.
Click here for the Scope analysis:
https://www.scopeexplorer.com/files/get/?name=news.ReportFile/bytes/filename/mimetype/ScopeExplorer_Aktiv_versus_Passiv_2021_Feb.pdf
