Active vs Passive

The recent market downturn had negative consequences for many investors' portfolios. In an environment marked by severe macroeconomic stress and unprecedented volatility, both actively and passively managed investment strategies suffered. After a year of undifferentiated performance, some investors are revisiting the debate surrounding the merits of active versus passive investing styles.

Active and passive portfolio managers approach investing from different perspectives. Passive strategies such as index funds attempt to mimic the returns of the market. Active managers believe there is value in being different and seek ways to deliver that value to investors. Passive strategies attract investors with low fees and - when the market is performing well - market-like returns. During a downturn, the value of passive portfolios fall in sync with the market. Looking at the active-passive debate from a purely performance perspective, we believe the current macroeconomic and mar...