Ten reasons to choose active management
While the growth in passive investing has arguably been the single most considerable stock market development for a generation, there are at least ten reasons why active is still attractive.
Ironically, as more assets continue to flow into funds looking to replicate a benchmark, either explicitly or secretly via closet indexing, opportunities increase for truly active managers to exploit the market inefficiencies it creates. So, how do you give yourself the best chance to pick a winner?
Let's start by exploring the below top ten reasons:
Exploit market inefficiency
Niche market advantages
Better resource allocation
Stewardship
Higher returns
Value for money
Risk management
Flexibility
High conviction in best ideas
Long-term thinking