US Markets

Best investing performance is when man and machine work together, portfolio manager says

Pro: Best performance is when man and machine work together

BlackRock's decision to rely more on computers to pick stocks has renewed the debate over man versus machine.

However, Rockland Trust portfolio manager Doug Butler told CNBC on Wednesday the future is really about "man with machine."

"The best performance generally is when man and machine work together versus man alone or machine alone," he said in an interview with "Power Lunch."

BlackRock said Tuesday it would overhaul its actively managed equities business, cutting jobs, dropping fees and having machines do more stock picking.

Art Hogan, chief market strategist at Wunderlich Securities, told "Power Lunch" the industry is always evolving.

"One of the things it comes down to, if you want to attract investors' dollars you need to offer value proposition, you need to offer it at a lower price. So I think BlackRock being on the cutting edge here is finding that hybrid in between active and passive with the use of computers and machines," he said.

Hogan believes at the end of the day it comes down to whether active management can beat passive management. And while passive has outperformed active recently that's because it has been an ultra-low interest rate environment – and most business models work with a low cost of capital, he explained.

However, when interest rates go up, there are business models that don't work with a higher cost of capital and "I think active takes over here," Hogan noted.

Meanwhile, Butler believes active management can pay off when there is a lot more volatility in the market than there is currently.

— Reuters contributed to this report.