Time will tell

James Saunders Watson of J.P. Morgan Asset Management says ETFs are in vogue, but investment trusts have stood the test of time.

The recent popularity of exchange traded funds (ETFs) has raised the debate as to whether such a passive approach provides investors with the same opportunities as actively managed investment vehicles, particularly investment trusts. Limited return potential ETFs are sold as a simple and cheap way to gain exposure to a particular market or asset class. The key argument promoting ETFs is markets operate efficiently and active managers do not deliver consistent out performance over the long term. This argument looks persuasive on paper; however, what appears straightforward is often n...