Active can work with passive, says Russell
New research conducted by Russell Consulting suggests active and passive investment strategies are not necessarily mutually exclusive.
Russell’s senior consultant in Australia Nick Curtin said the decision between an active or passive approach would vary from one investor to the next.
“Most importantly, our research shows investors can use both strategies together so long as they carefully assess the merits of each on a case-by-case basis,” Curtin said.
Discussing the merits of active versus passive investment in a research paper, Curtin said that although there was little expectation of a difference in the average performance of active versus passive approaches where markets were efficient, there were some instances where investors wanted to choose active over passive management.
He said such examples included inefficiently constructed commodities futures, or a commodities futures sector where there was no universally accepted index.
Curtin also suggested it was too soon to tell whether it would be possible to passively replicate after-tax indices efficiently.
Recommended for you
The Australian financial advice industry has risen by more than 20 advisers this week, with nearly half joining WT Financial and Sequoia.
Two financial advice professionals have shared their tips for success when building an effective Professional Year program as more advisers look to bring on junior staff to their practices.
Numbers are in for 2024, with Wealth Data confirming how many advisers left during the calendar year and which business models saw the largest growth in terms of new licensees.
Praemium has seen its highest net inflows in over two years for Q2 FY25 as its Powerwrap platform returns to inflows after five consecutive quarterly outflows.
