Should you blindly follow the market or try to beat it? Is the latter the smart move or hubris? With exchange traded funds (ETFs) and other index trackers becoming more popular every year, these questions are never far from investors’ minds.
Each approach has its merits, and indeed many investors will simply opt to do both.
Despite the rise of tracker funds, there are plenty of arguments in favour of an active rather than a passive approach. Doing so is not just about the potential for outperformance, but also about managing risk and reducing concentration at a time when AI is all markets seem capable of focusing on. For many, it also makes investing a lot more interesting.