Extract from article by Shawn Phillips, Junior Research and Investment Analyst at Glacier by Sanlam
As with most things in life, the ideal lies somewhere between two extremes. In an upward trending
market, passive investing should perform well, but in a downward trending and sideways trending
market, one would want to select an active manager with the hopes of creating superior returns. The general idea behind this article is not to advocate for either active or passive investing in isolation, but to create a blended approach using both active and passive management. The idea is to select active managers that the investor has a high conviction in, where the investor buys into the respective manager’s philosophy, investment process and experience, and then couple this with a few passive alternatives to create a long-term investment strategy which will be discussed in detail in the third instalment of this series.