Johann Bornman: Measuring active and passive against three golden rules

The serious debate as to whether active or passive investments are better for a portfolio rages on. Active fund managers point to the possibility for outperformance and the protection of returns on the downside. Passive proponents on the other hand point to the lower fees, better returns and the pure implementation of a particular asset class - in other words, there are no overweights or underweights of certain sectors and industries compared with active funds. This debate has produced an exceptional amount of literature and Standard and Poor's even publish a semi-annual report, entit...