Investors hoping hands-on management will boost their returns may be disappointed as more asset allocators are eschewing active funds for their passive, index-tracking cousins.
"There are certain asset classes where it's very difficult to find alpha," said Meike Bliebenicht, a product specialist responsible for the HSBC World Selection global multi-asset portfolios at HSBC Global Asset Management.
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In asset classes with high correlations, such as U.S. equities, "it's very, very hard to actually pick stocks which will be outperforming and there we've simply said it's not really worth holding active managers or just investing with active managers," she said. "We have substantial part of our U.S. equities exposure in index trackers."
The paucity of active managers who actually manage to create value is an often-cited reason for preferring passive index-tracking funds.