Investing

Active vs passive performance – Europe

The outperformance of passive funds continues in Europe, with the majority of active funds underperforming their benchmarks over the last 10 years according to both S&P Dow Jones and Morningstar. Summary   Whilst the degree of actives’ underperformance varied between regions, S&P showed active funds underperformed in every region measured (12/12), and the only region …

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Active vs passive performance – UK

Contrary to the popular belief that active strategies perform better in supposedly less efficient markets, such as the UK, 75% of large cap domestic UK active equity funds underperformed their benchmark over the last 10 years. Once factor exposure is taken into account, that figure rises to 95% of UK active funds underperforming their benchmarks. …

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Active vs passive performance – USA

The US has always been seen as a region where passives do well. The conventional thinking is that there are thousands of analysts and investment managers covering the stocks in the S&P 500, so the stocks should be pretty efficiently priced. Unsurprisingly, that seems to be the case, with passives trouncing their active counterparts over …

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Can anyone be truly passive? In search of the Global Market Portfolio

As we saw in my last post, investing in a 100% passive strategy using 100% passive vehicles would involve investing in every asset class in the world according to its relative size. The resultant portfolio would be the ‘global market portfolio’, which would reflect the entire wealth of the world, and would form the basis …

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Active vs passive – what’s in a name?

It’s hard to find somebody with an interest in investments who hasn’t been bombarded from all sides with information on the active vs passive debate. Entire rainforests have been destroyed by active fund managers publishing literature to try and combat the growing popularity of passive investing. For those who haven’t been subject to such bombardment, …

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Fees

This is the third post in a series of three on the factors that determine how much we can expect to make from investing. The first post covered how our risk tolerance affects our returns, the second post explored how our time horizon affects our returns, and this post covers how the fees we pay …

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Time

This is the second post in a series of three on the factors that determine how much we can expect to make from investing. The previous post covered how our risk tolerance affects our returns, this post explores how our time horizon affects our returns, and the next post covers how the fees we pay …

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Risk

This is the first post in a series of three on on the factors that determine how much you can expect to make from investing. How your risk tolerance affects your returns is covered in this post, and it’s this, combined with how long you invest for, and how much you pay for your investments, …

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Why should I invest?

No matter how high your income is, we’re all faced with the same four choices of what to do with our hard-earned cash. We can all either save it, spend it, invest it, or donate it. Saving in a bank account is relatively easy, spending is covered in a later post, and I’m not going …

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