Updated: May 19
Investment: I have a love/hate relationship with my industry. What I love about it is the fact that, as in sport, there is no argument about where one stands in the league table – investment performance is quantitatively measured and there are well accepted methods for judging how one compares with one’s peers. However, I dislike the way the debate between active and passive management is framed. The passive world points to the fact that around two thirds of actively managed funds underperform their benchmark net of costs, the implication being that active management should play no role whatsoever. In response, the active management world does a poor job of first understanding, then explaining to clients that this is inevitable – active management is a zero-sum game meaning, roughly speaking, that each outperformer requires an underperformer. No one is interested in who finishes in the middle of the pack in a marathon, so let’s stop paying so much attention to it.
Personal: I love my Apple products but just wish I felt it was easier to switch. Another love/hate relationship.
Published in Citywire
The views expressed in this communication are those of Peter Elston at the time of writing and are subject to change without notice. They do not constitute investment advice and whilst all reasonable efforts have been used to ensure the accuracy of the information contained in this communication, the reliability, completeness or accuracy of the content cannot be guaranteed. This communication provides information for professional use only and should not be relied upon by retail investors as the sole basis for investment.