Funds of fund strategies investing only in index or smart-beta instruments have performed better than those investing only, or mainly, in active funds over the past five years, research from Morningstar shows.
In absolute terms, across six different investment categories, where there were passive-only fund of funds, Morningstar's data showed the passive-only option outperformed their counterparts investing in a blend of styles or active only each time. In Morningstar's GBP Moderate Allocation category, for instance, fund of funds investing only in index or smart beta funds returned just over 4% in annualised terms over five years. For those investing in a blended strategy or in active only, that return was under 3%. While one reason for this is a general underperformance from active stra...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
