active v passive

As the biggest ETF provider in Australia, Vanguard has the right to crow about another knockout performance over active equity. But invective commentary is a red flag, especially when it’s based on something as changeable as recent market performance.

With traditional equity managers losing the fight against passive product providers, diversification into more specialist classes of asset management may provide a more sustainable path. But that’s a pricey endeavour, and easier said than done.

Plenty of significant investment opportunities exist in the market according to Bell Asset Management’s Ned Bell and John Malloy from Redwheel, but investors need to look beyond large caps and developed markets to find them.

While active management can provide pockets of outperformance both here and globally, research from S&P Global suggests maintaining above-benchmark returns is difficult to maintain.

The pendulum may have swung back towards active management this year, but the domestic ETF market is flush with options and continues to steal FUM.