How Active and Passive Strategies Can Work Together

When combining active and passive strategies, it’s important to remember that no two markets are the same, and that each approach can offer varying opportunities 

Fidelity International 18 June, 2015 | 12:08PM
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Morningstar's "Perspectives" series features investment insights from selected third-party contributors. Here James Bateman, Head of Portfolio Management, Fidelity Solutions, discusses how active and passive strategies can work together in a portfolio.

The ‘active versus passive’ debate has become part of the furniture for investors in funds, where each of these types of strategy offers a different set of risks, costs and benefits over time. While active managers can add value through their expert stock selection and research capabilities, passive ‘index-tracking’ strategies can provide broad access to markets, offering diversification at lower costs. Which is better for investors overall? There’s no ‘right’ answer, and no need to make a philosophical choice between the two – if combined intelligently, they can work well together in an overall portfolio.

Know Your Markets – Active Management Works Better In Some Than Others

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Fidelity International

Fidelity International  

is a global leader in asset management, providing investment products and services to individuals and institutions in the UK, continental Europe, the Middle East and Asia Pacific.