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Active or passive? It’s not a competition

Choosing between active and passive investment strategies is not an either/or decision.  Both have their place. The point is to deliver value to investors, says Ankul Daga, senior investment strategist with Vanguard Europe.

Debate about the relative merits of active and passive investment strategies is perennial. But it has become considerably more heated in recent years as investors have favoured passive funds.

Unfortunately, this heat can produce smoke that obscures our goal as investment professionals: to give our clients the best chance of investment success. Too often, the debate is framed in a way that puts our professional egos, rather than client goals, at the centre of the conversation.

Look, I get it. I like to win. When I watch a football match or game of cricket, I empathise with the euphoria of the winning team.

Investing engages this same primal impulse. A market is made when two individuals agree a time and a price for the transfer of an asset. As the value of that asset subsequently rises or falls, one of those individuals will be deemed to be the winner. The other will be the loser.

To find out more about how putting clients first can help reframe the active/passive choice, read more here.

Article disclaimer

Important information:

This information is directed at professional investors and should not be distributed to, or relied upon by, retail investors. It is for educational purposes only and is not a recommendation or solicitation to buy or sell investments.

This article is designed for use by, and is directed only at, persons resident in the UK.

The material contained in this document is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so.

The information in this article does not constitute legal, tax, or investment advice. You must not, therefore, rely on the content of this article when making any investment decisions.

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.

The opinions expressed in this article are those of individual author and may not be representative of Vanguard Asset Management, Limited.

Issued by Vanguard Asset Management, Limited, which is authorised and regulated in the UK by the Financial Conduct Authority.




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Best of both worlds: Blending active and passive

Looking to blend active and passive investment strategies? There are four key factors you need to know about, explains Ankul Daga, senior investment strategist with Vanguard Europe. Discussing the merits of active and passive investing with financial advisers, I am often surprised to discover how many are blending active and passive funds in their portfolios. […]


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