There is perhaps no controversy in the investing world more contentious than active versus passive equity investment management — whether it's better to have an equity portfolio that's actively managed or one that passively gets the returns of market indexes or selected groups of stocks. The intensity of this long-running fight is on a level comparable to that of Democrats versus Republicans.
Members of both camps perennially argue that their way is unequivocally the best, despite real-world results that support one side's argument one year and the other's the next. As investors seem to have one religion or the other, few use both methods.
Yet, when used in tandem, the two methods can work together in ways that deliver the best of both worlds while compensating for the downsides of each.