menu

Cameron Passmore CIM, FMA, FCSI

Portfolio Manager

Benjamin Felix MBA, CFA, CFP

Associate Portfolio Manager
Contact
  • T613.237.5544 x 313
  • 1.800.230.5544
  • F613.237.5949
  • 265 Carling Avenue,
    8th Floor,
  • Ottawa, Ontario K1S 2E1

An Open Letter to Active Fund Managers

January 8, 2015 - 0 comments

Dear Active Fund Managers: Please do not give up!

We know that 2014 was an especially difficult year for you, and though it was not the first difficult year that you have endured, it was surely the most public. Do not allow yourselves to feel discouraged from headlines like “The Decline and Fall of Fund Managers” and “The Triumph of Index Funds”; maybe your bets and predictions will be more accurate in 2015.

It cannot be easy watching institutions and retail investors aggressively shift their assets from active to passive funds – Morningstar data for a trailing one year period through November 30th showed that active U.S. equity funds lost $91.9 billion, while passive U.S. equity funds received $156.1 billion. At least there were positive flows of $67.6 billion across all active U.S. domiciled fund categories, though passive funds did see inflows of $385.7 billion despite consisting of a significantly smaller fund universe.

Try not to worry too much about Warren Buffett and CalPERS advocating for index funds. Just because they are two of the most well respected and influential figures in the investment world does not mean that they are always right.

Right now it may feel impossible to pick the right stocks or guess the market direction, but do not let your confidence wane! You see, for everyone else to enjoy an efficient market, at least a handful of you need to continue your vigorous research and due diligence on securities. Each one of you may only get it right sometimes, but the aggregation of your predictions plays a role in getting accurate information into prices.

There will always be some investors eager to pay your high fees in hopes of beating the market, regardless of what the data says – you will never be obsolete. So please, ignore the media, the data, and the thought leaders, and keep up the great work!

Sincerely,
Investors

By: Ben Felix with 0 comments.
Comments
Blog post currently doesn't have any comments.



 Security code