S&P's Edwards: "Indices can offer top quartile or better performance"

Partner Insight: Over the past decade much has been made of the uptick in global passive assets under management. Low-cost products such as ETFs have continued to gain market share, forcing fund groups to develop a clear strategy that differentiates their capabilities.

The cost efficiency of the passive investment approach is one of the key drivers behind all this, according to Tim Edwards, senior director of index strategy at S&P Dow Jones Global Indices.  "It is typically much cheaper to track an index than it is to employ portfolio managers with the skills to outperform, or potentially outperform. "A second driver is performance. We do reports in major markets that compare the performance of active investors to passive indices. And actually in the majority of markets, most of the time, indices can offer top quartile or better performance, not jus...