The challenges and opportunities for active managers

It has become increasingly difficult for active managers to keep pace with major global indices such as the S&P 500 or MSCI World. The strong performance from a handful of US mega-cap technology companies, Novo Nordisk and ASML in Europe, and TSMC in Asia, has powered index returns, while investors across the globe have largely neglected opportunities further down the market capitalisation spectrum. The resulting concentration in a single country (the US), a single sector (technology) and a handful of large-cap stocks is higher than it has ever been. The MSCI World is more than 70% w...