Active fund management ‘is alive and profitable’
While views differ, passive management assumes that markets are efficient, which is not necessarily the case
One would expect active fund managers to be worried about the projected pressure that is going to come from the rise of passive investment. Fund managers at the Investment Forum, held in Sandton on Wednesday, said they expected about 25% of global assets to be allocated to passively managed funds within the next four years. Already the rise of passive funds is putting downward pressure on active managers’ fees. Investec Asset Management deputy MD Sangeeth Sewnath, however, believes real active managers see opportunity from the shift towards passives. “The more people choose to invest in passives means that there’ll be less people out there looking for opportunities in assets that are not fairly valued,” he said on Friday. Like the fund managers who debated the future of active managers at the Investment Forum, Sewnath said there will always be a room for both passive and active to coexist and no matter how much pressure managers face, active management will continue to thrive. “The ...
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