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Meet the marriage of active and passive investments |
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| By Staff Writer |
Q2 of 2023 | 1 year ago |
Innovations are at the forefront of every industry of societies , few thing are cast in stones.Traditionally, there were two distinct styles of managing a unit trusts:- Active Asset Management
- Passive Asset Management
Passive management saw a huge growth in the last few 5 or so decades , that growth comes at a stagnated or decline of the century-old active management of the unit trusts.
Forward thinkers come up with a brilliant innovative idea of trying to merge these two styles of management, the resulting product is Actively Managed Exchange Traded Funds (AMETF).
The Actively Managed ETF tick almost all the benefits passive investing with now the fund manager given a leeway to adapt the fund with accordance with the changing market conditions at that time e.g if there is a shares bloodbath in JSE Top 40 mining shares , the manager , have a opportunity to reduce exposure in the mining shares and buy more in stable industrial shares . The take away is that this innovative will not blindly follow and replica the underlying indices. The benchmark maybe different to the actual index. Like in traditional marriage , active management bring in the experiance , knowledge and extensive research of a human factor ,while the passive management brings the likes of lower fees, very transparance and liquidity.
We will be here to see how this grows and adaptations will be be in the next years. ETF took decades to be the now darlings of attracting new monies.
| Did You Know ? |
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| Asset manager Prescient Asset Management was founded by the Guy brothers Herman and Toms. |
| The JSE allowed listings and trading of the Actively Managed ETF in 2023. |
| Simon Hudson and Wiston Floquet founded in 2001 Flagship Asset Management. |
| In 2019, Stanlib spinned off index tracking funds to a boutique asset manager 1VEST. |
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