Resources
When it comes to ETFs, should you bet against the house?
The question of active versus passive management in the ETF sphere is a wriggly one, ETF Securities’ Kris Walesby has said, but it comes down to one “easy rule”.
When it comes to ETFs, should you bet against the house?
The question of active versus passive management in the ETF sphere is a wriggly one, ETF Securities’ Kris Walesby has said, but it comes down to one “easy rule”.
Speaking to the Nest Egg podcast team, the head of ETF Securities explained that the nature of exchange-traded funds (ETFs) is that they track a set of rules, as is the case for his company.
However, he acknowledged that other groups like Magellan and Platinum offer active ETFs on their traditional managed funds.
“Do you take an active manager, which has been a mainstay until about five years ago? Or do you take passive, and that's normally for anyone but big institutions through an ETF? Which is better? Am I doing something stupid if I take an ETF, or am I making a mistake if I take an active?” Mr Walesby asked.
However, according to Mr Walesby, there’s a “very basic and easy rule” investors can follow to answer this question.
“You should take an active manager if you think that she or he is very likely to outperform the market that they're either tracking, or if they're something called an absolute return fund, which means that they're not tracking anything,” he said.
“If you think that they're going to provide you a really, really good return, then you should, because you would be stupid not to.”
But if the evidence isn’t there to support that particular fund manager, it may not be the wisest choice.
“On the whole, it's difficult to beat the odds and the market, it's like a casino in the fact that the house always wins,” Mr Walesby said.
“The market is the market and you'll always have slightly more losers than winners because there're transaction costs, as well.”
His advice to unsure investors was to incorporate passive funds into a portfolio and added that his aim is to “demystify” the active-passive discussion.
“Everyone talks about two camps, when actually for most people, it should be a blend,” Mr Walesby said.
RELATED ARTICLES
Podcast
Investing in a secure retirement
In this episode of Relative Return, host Phil Tarrant is joined by Amanda Gardner, National Strategy Manager at Challenger, to examine the latest retirement income innovations. Read more
Podcast
Reaping the benefits of private markets exposure
In this episode of Relative Return, host Keith Ford speaks to the managing partner of Metrics Credit Partners, Andrew Lockhart, about the benefits of private markets exposure in a diversified ...Read more
Podcast
Flying high with infrastructure investment
In this episode of Relative Return, host Maja Garaca Djurdjevic speaks to John Julian, fund manager of the Dexus Core Infrastructure Fund, to discuss infrastructure opportunities and the outlook for ...Read more
Podcast
A transparent look at Australian equities
In this episode of Relative Return, hosts Charbel Kadib and Laura Dew chat to Adam Alexander, portfolio manager at Schroders, about Australian equities and why separately managed accounts are ideal ...Read more
Podcast
Daily Buzz: Thursday, 9 November
PropertyBuzz, your daily dose of property news. RentTech Platforms Accused of Ruthless Data Gouging, Share House Listings skyrocket, and Was the RBA’s Cup Day Rate Rise Justified? Read more
Podcast
Differentiating a small cap fund
In this episode of Relative Return, hosts Charbel Kadib and Laura Dew speak to Simon Brown, co-portfolio manager at Tribeca, about small cap performance and how he differentiates his fund. Read more
Podcast
A collective awakening on the retirement gap
In this week’s episode of Relative Return, host Maja Garaca Djurdjevic speaks to Patrick Clarke, general manager of retirement solutions at Generation Life, to discuss how super funds can help members ...Read more
Podcast
Wrapping up an eventful 2021
In the final episode of The nestegg Podcast for 2021, host Maja Garaca Djurdjevic checks in with our three experts to hear their final thoughts on the year that’s passed and their hopes for the next ...Read more
Podcast
Investing in a secure retirement
In this episode of Relative Return, host Phil Tarrant is joined by Amanda Gardner, National Strategy Manager at Challenger, to examine the latest retirement income innovations. Read more
Podcast
Reaping the benefits of private markets exposure
In this episode of Relative Return, host Keith Ford speaks to the managing partner of Metrics Credit Partners, Andrew Lockhart, about the benefits of private markets exposure in a diversified ...Read more
Podcast
Flying high with infrastructure investment
In this episode of Relative Return, host Maja Garaca Djurdjevic speaks to John Julian, fund manager of the Dexus Core Infrastructure Fund, to discuss infrastructure opportunities and the outlook for ...Read more
Podcast
A transparent look at Australian equities
In this episode of Relative Return, hosts Charbel Kadib and Laura Dew chat to Adam Alexander, portfolio manager at Schroders, about Australian equities and why separately managed accounts are ideal ...Read more
Podcast
Daily Buzz: Thursday, 9 November
PropertyBuzz, your daily dose of property news. RentTech Platforms Accused of Ruthless Data Gouging, Share House Listings skyrocket, and Was the RBA’s Cup Day Rate Rise Justified? Read more
Podcast
Differentiating a small cap fund
In this episode of Relative Return, hosts Charbel Kadib and Laura Dew speak to Simon Brown, co-portfolio manager at Tribeca, about small cap performance and how he differentiates his fund. Read more
Podcast
A collective awakening on the retirement gap
In this week’s episode of Relative Return, host Maja Garaca Djurdjevic speaks to Patrick Clarke, general manager of retirement solutions at Generation Life, to discuss how super funds can help members ...Read more
Podcast
Wrapping up an eventful 2021
In the final episode of The nestegg Podcast for 2021, host Maja Garaca Djurdjevic checks in with our three experts to hear their final thoughts on the year that’s passed and their hopes for the next ...Read more
