Given the majority of its members’ interests are in beating benchmarks, isn’t it time we had an IA that was a real cheerleader for active management?
The range of funds on offer from asset managers, and indeed the mind-set of the people that run them, has evolved tremendously over the past decade. The problem has been getting that message through to the investors that will benefit.
Long have the naysayers banged the drum on our industry’s failures – primarily that most stockpickers fail to outperform their passive counterparts. It’s a valid argument, but the message is often misleading.
Asset managers have, by and large, acknowledged the problem and acted accordingly to reinvent themselves and thus place more emphasis on the virtues of sensible asset allocation, downside protection and above all patience.
The value of long-term investing, and the compounding of income from yielding funds, have long been part of the mantra, but the widespread availability of absolute return and multi-asset funds have made for a more compelling offering.
And this sits comfortably alongside an ever diverse and sophisticated market for ETFs and tracker funds.
In volatile markets, good active management is worth its weight in gold. Of course, finding those capable managers is where the independent wealth manager comes in.
