How Being Patient Rewards Investors More than Stock Selection

Benefitting from the superior returns offered by contrarian strategies is more difficult than simply purchasing a strategic beta fund - you have to have patience to realise gains

Dan Kemp 20 April, 2015 | 11:32AM

The rise of strategic beta strategies is causing an existential crisis for active managers. These semi-passive strategies have systematised many of the sources of outperformance formally attributed to fund manager skill, encouraging us to ask: could strategic beta funds lead to the demise of active management.

Investors typically underestimate the time required to realise gains

While strategic beta funds undoubtedly pose a challenge to active management, accessing the superior returns offered by these strategies is more difficult than simply purchasing a strategic beta fund.

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About Author

Dan Kemp

Dan Kemp  is Chief Investment Officer, Morningstar Investment Management EMEA

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