The debate about active versus passive management is an incredibly polarizing topic, with many well informed experts passionately holding views on opposite extremes. Why is this? We believe much of the public narrative on this topic is one-sided or incomplete. Depending on their perspectives (or financial incentives), people often focus on only one side of the debate and ignore the other. Some people have grown so dogmatic that they fail to listen to valid points from the other side. With all the varying research and statements made by professionals, what should investors believe?
The statements people make are often half-truths, in that they are valid perspectives, but not the complete story. They can mislead people at the same time as inform them. Both sides of this debate tell such half-truths.
We seek to bring order to this debate by laying out the research on both sides, and describing how we develop recommendations for our clients. We do not see a one-size-fits-all solution. Some investors are well positioned to be successful with certain types of active management, while others are likely to perform best with passive. Hopefully, this paper will help investors understand what is most appropriate for their portfolios.
To learn more about active vs. passive management, download the full whitepaper above.
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