The passive-active twist
Strategies range from tracking the US equity stock market to the JSE top 40 or the Chinese property index, writes Marcia Klein
Growing acceptance of and interest in so-called passive investing has led to an increasing number of choices, essentially making passive investment decisions much more active than they have ever been. Traditionally, passive investment centred on owning the market in simple, market cap-weighted index form — as opposed to active management, which was aimed at outperforming indices with nuanced portfolios that were actively managed and traded. The benefits of passive investment options were lower fees and reduced risk of underperforming the general market. But passive investment has become more complicated and sophisticated over time, and many investors are unaware of the choices open to them. There is a huge pool of different types of passive investment strategies, says Siyabulela Nomoyi, portfolio manager at Sygnia Asset Management. These include anything from tracking the US equity stock market’s performance to tracking the JSE top 40 or the Chinese property index.
Such strate...
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