Speaking at a private dinner on Wednesday, chief executive Webb said last year’s volatility and uncertain market backdrop had been a challenge unless investors were exposed to the outperforming oil and gas, miners and financials sectors, which together comprise roughly 65% of the FTSE All-Share.
Yet he said investors following such short-term trends were on a “definite signal to disaster”.
Webb was asking for the “evangelists” of both active and passive investing styles to rein in their rhetoric, believing it to be unhelpful to the industry as a whole.
“I believe passive absolutely has its place; both approaches can add value. But I am sick of the active/passive argument.
“All the evangelists from either side need to stop doing what they are doing, sit back and discuss why someone wouldn’t want to invest with those managers who are trying to find companies that are sustainable outperformers over the long term.”
He said he had never quite seen such an extreme momentum trade as was witnessed in 2016 and praised active managers who didn’t buy into it, choosing instead to take a long-term view – not just one year, or three years – and remain committed to their process.
“The good managers are those who have the courage of their convictions to find stocks where value will be recognised over time because it is a good business, not because the fickle market just decides it a good business and over or underdoes it.”
Webb added: “If we lose this argument about passive it will be to the detriment to the entire industry and to those companies who need to raise capital.”
