Niels Jensen, CIO of Absolute Return Partners, takes a closer look at the longer-term implications for investors of the rapid growth of passive strategies.
Global markets have been sucked into a risk on, risk off environment since 2008. Correlations between risk assets will be much higher than usual in a risk on, risk off environment. When risk assets are highly correlated, investment managers struggle to find alpha, and nowhere has it been more painful than in the equity space. The result is clients can't understand why they should pay the higher fees for active management when results are no better, and in many cases worse, than when investing passively. Consequently, large sums of money have moved from active to passive equity ma...
To continue reading this article...
Join Investment Week for free
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes