Johann Bornman: Measuring active and passive against three golden rules

Performance and fees two sides of same coin

clock • 4 min read

Johann Bornman considers how active and passive funds measure up against the key benchmarks of not losing money, actually aiming to make money and, finally, shooting for above-average returns

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...

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