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
Far too few wealth managers are capitalising on the opportunity presented by disruptive technology to deliver personalised investment solutions to the mass affluent demographic, according to PwC.
With over half of advisers using managed accounts, HUB24’s head of managed portfolios has unpacked the benefits driving their usage and how they can be leveraged by advice practices.
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
ASX-listed platforms HUB24, Netwealth, and Praemium have used their AGMs to detail how they are using artificial intelligence to improve their processes and the innovative opportunities it presents.
