EDITORIAL: Steinhoff drama revives active-passive debate
The Steinhoff drama has opened up myriad problems but perhaps one of the most unexpected twists is that it has rekindled the active-passive debate among fund managers. In its most superficial form, the debate is simple. Active fund managers have used the occasion to make the point that it’s precisely this kind of dramatic incident that justifies an active stock-picking approach. After years of being accused of charging clients much higher fees than passive fund managers, here at last is an incident that justifies their approach. Or does it? One active fund manager made this point in a note to clients this week, saying certain passive fund managers had used the events to launch a renewed attack in the media on active fund management. "We find these comments extremely self-serving and misleading." Passive index funds were required by design to hold Steinhoff International at its full benchmark weight in the relevant indices throughout the events of last week. They will continue to do ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.