Exploiting investors who aren’t even trying
According to detractors of active management, passive investing is a no-brainer. It’s generally the cheaper way to invest and anyway, outperforming the index is just too difficult for a variety of reasons. If you can’t beat ‘em, join ‘em or so the logic goes.
We agree – passive investing IS a no-brainer. For active managers like us, the rise of indexing has opened the floodgates to being able to take advantage of investors who aren’t even thinking about the underlying fundamentals of businesses they own nor the prices they’re paying to own them. To our benefit, there’s really no brainpower fuelling their investment decisions.
Our very own Geoff MacDonald recently joined a Morningstar panel to talk about what some perceive as the slow death of active management in favour of passive strategies. Read why we simply don’t think that’s the case in: