The Rate of Return of Asset Allocators, Strategists, and Portfolio Managers include both passive and active. One way to look at this is passive is the benchmark, and active is what is different from the benchmark. Technology will continue to increase productivity of humans while displacing humans at the same time. ETF’s now replicate factors. The screening of P/E, yield, and other absolute and relative variables are now low cost ETFs.
Parts of portfolio construction are being displacement by technology. Growth, value, large, mid, small, P/E yield, and PEG are now passive ETF’s. It is our industries challenge to use passive actively to add value for our clients Understanding how low-cost passive is part of what you are actively doing can add value.
The only way to beat the benchmark, net of fees, is to be different from the benchmark. Yes, we need to actively drift, to win.
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