Active and Passive Strategies: An Opportunistic Approach

For decades, debate has raged among proponents of the active and passive approaches to equity investing. Many argue that the sophistication and experience of professional active managers is necessary in the everchanging investment landscape; others point to the better long-term performance of passive approaches, in part due to lower management fees. Investors will often take sides and allocate exclusively to either active or passive funds. Our work suggests neither approach is always better and, instead, the optimal choice depends on the investment backdrop. Thus, we believe that allocating to active and passive strategies opportunistically, and making full use of manager selection tools, represents the best possible approach. Follow us on Twitter @MS_CIOWilson