Aurora Borealis
3 October 2019 Multimedia

Practitioners’ Insights: Passive Investing in an Active World

  1. Anil Ghelani, CFA
  2. Shreenivas Kunte, CFA, CIPM

Passive strategies have been attracting a large pool of investors who want to generate market returns at a relatively lower cost. From plain vanilla index funds and exchange-traded funds to quantitatively built smart beta funds for asset allocation, passive investing offers a variety of choices.

In India, the case for passive investing has not yet gathered as much momentum. Active management has had a good history of generating alpha (i.e., outperforming the benchmark). However, this has become increasingly challenging over time, especially in the large cap space. Recent analysis shows that in the large cap category more than 50% of the active funds underperformed the benchmark across periods of 1, 3, 5, and 10 years.

While the debate over active versus passive strategies may continue, many investors often seek a blend of both. For example, it is possible to adopt both styles through a “core and satellite” portfolio management approach. In this webinar, presenters will discuss passive investing approaches that wealth advisors and financial planners could use. In addition, they will also discuss some often misunderstood aspects such as “total cost of ownership” and using passive strategies to balance an active approach.

Key Learning Outcomes:

  • Understanding passive investments globally and how it is becoming increasingly difficult for active large cap funds to beat the benchmark.
  • Understanding the increase in investment flows to the passive space globally and its scope of growth in India.
  • Understanding passive investing strategies.
  • Understanding how passive funds could be positioned by advisors as a “complementary” and not as a “competing” strategy for accessing large cap equities.

 

This is the archived version of a live webinar that took place on 03 October 2019.

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