A Fine Line in the Active Versus Passive Debate
An increasing number of investors are actively using beta in their attempt to create alpha.
With the growing popularity of exchange-traded funds, and passive products in general, many industry observers have speculated on the demise of active portfolio management. However, I would argue that, in reality, active management remains as alive as ever.
Rather than outsourcing active management, many investors are taking matters into their own hands. Using products like ETFs to underweight or overweight certain market segments (beta) in an effort to achieve relative outperformance (alpha) is one of the more-pronounced trends in the industry today.
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