Multi-asset managers: How passives have helped us ride volatility

PASSIVES

Joanna Faith talks to multi-asset managers about why their use of passive strategies has increased over the past 12 months.

When the FTSE 100 plunged to below 5,400 during last summer’s sell-off, the Rathbones multi-asset team responded by buying a passive fund for the first time in both their Total Return and Strategic Growth portfolios. With markets so turbulent – sometimes falling over 2% and then rebounding 3% in one day – the team wanted more visibility than it could get from unit trusts, which only price once a day. The solution was an ETF that can be traded in minutes. “We were not trying to be too clever,” explains assistant fund manager, Mona Shah. “We bought the iShares FTSE 100. We chose the...