Why invest in closed-ended trackers

David McCraw, manager of the Edinburgh UK and US Tracker trusts, explains why passive strategies work well for investment trusts.

There is no right or wrong answer in the active versus passive debate and investors’ preferences will depend on their objectives and risk appetite. Active and passive investment strategies need not be regarded as mutually exclusive but potentially complementary. It is understandable that many investors may be reluctant to give up the potential outperformance of active management. However, the benefits of lower fees and greater certainty offered by indexed management also has its attractions and many investors are choosing a passive core for their investments and then adding active funds,...