Armchair critic: Why should beta take second place?

Back in 2002, Ron Sandler was surprised to note that, in the UK, institutional investors have a much higher appetite for index-based investment than retail investors. The typical institutional portfolio would be largely passives with some tactical exposure to active management. In the retail market since, there has been a move towards passive investments. Most discretionary fund manager (DFM) portfolios offer a combination of active and passives. It is constantly reported that most active funds underperform the median. To some extent the argument ought to have gone away. But it hasn’t...