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White paper — Passive vs. Active: Losing the Forest for the Trees

Down­load White Paper

The bat­tle between stock-pick­ing active and index-based pas­sive man­age­ment has been rag­ing for years, but in 2016 the momen­tum was all on the side of pas­sive man­agers. Black­Rock, Van­guard, and State Street occu­py the top spots on the AUM tables, each pas­sive­ly man­ag­ing tril­lions of dol­lars. Mean­while, tra­di­tion­al stock-pick­ing active man­agers have been hem­or­rhag­ing assets.

Accord­ing to Morn­ingstar research in their Asset Man­age­ment Quar­ter­ly (1Q 2017), U.S. pas­sive mutu­al funds added $492bn in 2016, where­as active man­agers have shed $204bn. The­se num­bers are for open-end­ed mutu­al funds and don’t include ETFs or the shift in insti­tu­tion­al assets, where the same trends are under­way.

By now the argu­ments for and again­st pick­ing stocks and index­ing are well doc­u­ment­ed.

At Swan Glob­al Invest­ments, our take on the whole pas­sive-ver­sus-active debate is a bit dif­fer­ent. It doesn’t mat­ter. Active or pas­sive: it doesn’t mat­ter.

Dive into this engag­ing paper to learn why, and more impor­tant­ly dis­cov­er what may be over­looked in the broad­er pas­sive vs. active debate.