And as a multi-asset manager himself, running £532.5m across the Rathbone Multi-Asset Portfolio range, he says he views fixed income biased passive allocation strategies with “caution.”
“The long-term potential returns from UK gilts are no longer attractive, which begs the question are they the best choice for decreasing portfolio risk? We think not.”
But the unsuitability of tracker funds to generate competitive returns over the next decade isn’t an automatic win for active managers.
They need to re-think some of the old conventions that simply aren’t working, like judging performance on a three-year time horizon or by “growth” and “value” metrics.
Still, “when it comes to asset allocation within multi-asset portfolios, therefore, we believe active managers are more likely to protect and grow capital,” he stressed.
“How can you overcome the intricacies of a new world order with a ‘blunt tool’ passive investment vehicle?”
