Blue Whale's Yiu on the biggest issues facing the industry

Not competing with passives

Tom Eckett
clock • 2 min read

Stephen Yiu, chief investment officer and lead manager of the newly launched £49m Growth fund at Blue Whale Capital, has said closet trackers are his biggest industry concern as they continue to give active management a bad reputation.

Speaking to Investment Week, Yiu claimed the majority of funds are closet trackers. "What happens is [fund providers] gather assets through strong marketing, run a diversified portfolio and monitor tracking error to make sure they are not significantly overweight or underweight the benchmark, but this is not investing," Yiu said. He added fee pressure in the industry was due to active managers consistently failing to outperform their respective benchmarks. In March, the Financial Conduct Authority revealed a number of asset managers had taken the step of paying £34m in compensation...

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