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Feature: Smarter investing, greater responsibility
26 August 2010
The ‘active vs passive’ debate has been a regular fixture in the fund management industry but it is now looking as if the rules are beginning to change with the development of new, smarter investment strategies that require investors to shoulder greater responsibility
The new mantra is that the fund management industry must not return to the old ways. Numerous studies have been published proclaiming a new order, for example Pimco’s ‘the new normal’. Research departments have been busy deconstructing the investment process in the search for more focused management techniques, and in the process flushing out those strategies that purport to be active, while actually shadowing a benchmark.
Many of the traditional assumptions regarding returns and correlations of asset classes are now viewed with a much greater degree of scepticism, says Frank Udo, chief executive of RCM, the equities division of Allianz Global Investors. Since the crisis, a loss of confidence has led clients to look for simplicity, transparency and liquidity, as they want to understand the investment, get a valuation on a daily basis and get a sale within a reasonable time period.
Institutional investors also want performance to meet...
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