Investment Conundrums: WTW's Baker looks ahead to active management's 'time in the sun'

Will actives finally outperform passives?

The long-awaited reversal in the dominance of mega-cap growth stocks will lead to active management once again having its "time in the sun" and ultimately the outperformance of the Alliance Trust (ATST), according to global CIO of Willis Towers Watson Craig Baker.

Baker, who has chaired the £3.1bn trust's investment committee alongside Mark Davis and Stuart Gray since April 2017, said that over the past few years "equity markets have been driven by a very narrow set of large-cap stocks", which has been a "headwind for asset management" as passive has absorbed outsized returns. The multi-manager portfolio currently allocates to nine managers across ten highly concentrated portfolios, which each invest in a maximum of 20 stocks globally. Outperforming throughout the duration of the ongoing bull market has been rare, FE Fundinfo data shows. Of ...