Tag Archives: active v. passive

Passive Investing Opportunities in India

Fifty years ago, there were no index funds—all assets were managed actively. The subsequent shift of assets from active to passive management in the U.S. and European markets could be considered one of the most important developments in modern financial history, and this shift was the consequence of active performance shortfalls.[1] In India, we have Read more […]

Prediction for 2018: There Will Be Many Predictions

A calendar that offers a forecast for every day of the coming year is not uncommon in Chinese households.  I don’t often hear references to the calendar on most days. But every now and again I would hear my mom marvel, “Oh that calendar was right on for today!” In investing, there is also particular Read more […]

2017…Among the Sleepiest of Years

If 2016 was unremarkable, 2017 was downright sleepy…at least as far as equity markets were concerned. In 2017, the S&P 500 notched the lowest level of volatility in 27 years. Both dispersion and correlations were among the lowest levels in the same period. This is in spite of a year that was far from lacking Read more […]

Pockets of Active Achievement

The last 16 years have not been kind to active management. But that shouldn’t come as a surprise. Unless the laws of basic arithmetic change, the theoretical argument on the perils of active management is ironclad. SPIVA data offer solid evidence to back up theory. As the chart below shows, most active managers underperform most Read more […]

The Walking Dead Return (as Active ETFs)

In AMC’s “The Walking Dead,” we meet Rick Grimes after he awakens from a coma to find himself in post-apocalyptic world filled with legions of zombies.  Rick calls these zombies “walkers,” but as each season goes by (season seven starts this October) different groups name them other things, like biters, roamers, lurkers, etc.  The names Read more […]

Who Fuelled the Oil Bonds Bubble?

It has become popular to blame passive investors and index funds for the recent rise (and fall) in prices for U.S. high yield bonds.  The thesis – placing passive investors as the culprit – goes as follows: There have been material, positive flows into passive bond funds, at the expense of active funds. Passive bond funds Read more […]

Does it Have to Be Active OR Passive? Why Not the Best of Both Worlds?

The debate on active versus passive investing is endless, and there are strong arguments on both sides. The active side argues on the advantages of alpha, star fund managers’ year-over-year record performances, better market timing, and better stock picking backed by thorough research. On the other side, there is a strong passive argument for capturing Read more […]

Ouch. That’s gonna leave a mark.

By my reading, the recent tone in the investment press and blogosphere has been decidedly, shall we say, anti-active.  Index-based investing has won, active has lost, time for stock pickers and portfolios managers to find new careers.  It’s over. One of the sharper summations of the zeitgeist comes by way of a recent post from Read more […]