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Wealth Professional | 18 Feb 2015, 10:07 AM Agree 0
At least that’s the opinion of a very well-known passive indexer who sees it getting harder and harder for active managers to outperform their benchmarks. However, you won’t believe why.
  • Tim Affolter | 18 Feb 2015, 12:54 PM Agree 0
    Might this underperformance by active managers not also be attributed to managers looking for defensive value stocks versus expensive growth stocks? 2014 was about as lopsided a year as we've seen in a long time, with the top quartile of the US market returning 18.2% at 35.7x p/e, while the bottom quartile returning only 2.8% at 13.8x p/e. I remember Peter Cundill suffering tremendous outflows in his Value Fund in 1999-2000 because he refused to buy expensive tech stocks (notably Nortel) in the Tech Bubble run up. His critics were singing a different tune in early 2001 tough... just saying...
  • Will Ashworth | 18 Feb 2015, 02:25 PM Agree 0

    Very good point. I had to think about the name Nortel for a second. They're still around?

    Passive vs. active will never die.

    If active disappears what happens to passive? Does it flatline?

    That's a topic for another day.
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