Insight Investment’s Post

𝐏𝐚𝐬𝐬𝐢𝐯𝐞 𝐯𝐬. 𝐀𝐜𝐭𝐢𝐯𝐞 𝐈𝐧𝐯𝐞𝐬𝐭𝐢𝐧𝐠 ?? 🤔 As the debate between passive index investing and active fund management continues, let's examine the relevant comparison : 💰 𝐂𝐨𝐬𝐭𝐬 𝐄𝐱𝐩𝐞𝐧𝐬𝐞 𝐑𝐚𝐭𝐢𝐨𝐬: Large-cap index funds (0.14%) vs. actively managed funds (0.82%) 𝐈𝐦𝐩𝐚𝐜𝐭: Lower fees mean more of your money stays invested and compounds over time 📈 𝐂𝐨𝐧𝐬𝐢𝐬𝐭𝐞𝐧𝐭 𝐑𝐞𝐭𝐮𝐫𝐧𝐬 𝐋𝐨𝐧𝐠-𝐭𝐞𝐫𝐦 𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞: Only 25% of large-cap funds beat the S&P 500 over a 15-year period 𝐌𝐚𝐫𝐤𝐞𝐭 𝐑𝐞𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧: While index funds won't outperform the market, they also won't significantly underperform 🌐 𝐃𝐢𝐯𝐞𝐫𝐬𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐁𝐫𝐨𝐚𝐝 𝐄𝐱𝐩𝐨𝐬𝐮𝐫𝐞: Well-diversified index funds typically hold hundreds of stocks 𝐑𝐢𝐬𝐤 𝐌𝐢𝐭𝐢𝐠𝐚𝐭𝐢𝐨𝐧: Spreading investments across various industries and company sizes reduces individual stock risk 🏦 𝐓𝐚𝐱 𝐄𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐜𝐲 𝐋𝐨𝐰𝐞𝐫 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫: Passive funds generally have lower portfolio turnover 𝐓𝐚𝐱 𝐈𝐦𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬: Reduced buying and selling leads to fewer taxable events and potential tax savings 🧠 𝐁𝐞𝐡𝐚𝐯𝐢𝐨𝐫𝐚𝐥 𝐅𝐢𝐧𝐚𝐧𝐜𝐞 𝐄𝐦𝐨𝐭𝐢𝐨𝐧𝐚𝐥 𝐃𝐞𝐜𝐢𝐬𝐢𝐨𝐧-𝐌𝐚𝐤𝐢𝐧𝐠: Active investing can be influenced by investor emotions and market sentiment 𝐂𝐨𝐧𝐬𝐢𝐬𝐭𝐞𝐧𝐜𝐲: Passive investing removes this human element, potentially leading to more stable long-term returns It's 𝐜𝐫𝐮𝐜𝐢𝐚𝐥 𝐭𝐨 𝐧𝐨𝐭𝐞: 🔍 𝐏𝐚𝐬𝐬𝐢𝐯𝐞 𝐢𝐧𝐯𝐞𝐬𝐭𝐢𝐧𝐠 𝐢𝐬𝐧'𝐭 𝐮𝐧𝐢𝐯𝐞𝐫𝐬𝐚𝐥𝐥𝐲 𝐬𝐮𝐩𝐞𝐫𝐢𝐨𝐫. Some investors may benefit from active management based on specific goals or risk profiles 📊 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐝𝐨𝐞𝐬𝐧'𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬 ⚖️ Diversification, while beneficial, doesn't ensure profit or protect against loss What's your take? Are you team passive or active? Have you seen these trends play out in your own portfolio? #Investing #FinancialPlanning #IndexFunds #WealthManagement #DataDrivenInvesting

Insight’s Christopher Broadley, portfolio manager, multi-asset strategy team, said: “This week’s chart highlights the interaction between government bond yields and equities in 2024, particularly how the latest leg higher in yields has stalled the equity rally. For most of the first quarter, yields trended higher as the combination of strong growth data and upside inflation led investors to push back the timing of expected rate cuts. Against this backdrop, equities enjoyed their third strongest start to the year since 2000. However, as upside inflation surprises have continued, the rate of change of yields has increased and in turn created a tough environment for risk assets.” Click here to see our chart of the week: https://bit.ly/4b9z354 Capital at risk. For professional investors only.

Insight’s Shantanu Tandon, CFA, portfolio manager, multi-asset strategy team, said: "Aggregate investor positioning and risk sentiment has reduced since the beginning of 2024. This has coincided with recent geopolitical tensions in the Middle East, a reappraisal of the inflation outlook and monetary policy implications, and rising bond yields. We see the potential for risk appetite to return if some of these risks were to abate in the near term." Click here to see our chart of the week: https://bit.ly/4b9z354 Capital at risk. For professional investors only.

Why do we need a fundamental shift in our approach towards the market now? Get to know more about it from Nimesh Chandan, our Chief Investment Officer, in this insightful interview by The Economic Times. Explore key strategies and actionable insights to stay on track in this constantly changing landscape. Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully. https://lnkd.in/dcmrynTZ

Discover the latest market happenings from the last quarter and understand why a prudent wait-and-see strategy is recommended amidst market uncertainties. Gain insights in our recent market commentary by Clifford Stanton, CFA, Director of Investments. Read here: https://lnkd.in/gjvn7UJm #MarketAnalysis #InvestmentInsights

INVESTOR LETTER MARCH 2024 | MARKET UPDATE - We are delighted to share with you a copy of the latest AAN Asset Management Quarterly Investor letter as well as a review of the performance of our AAN investment models. We hope you enjoy the read and get value out of this. This issue includes: 🔵Investor letter & update 🔵AAN Core Model 🔵AAN Growth Model 🔵AAN Australian Model 🔵AAN Index Core Model 🔵AAN Index Growth Model 🔵AAN Sustainable Growth Model Simply click the link below to view the Quarterly Investment Update: https://lnkd.in/gj3qHP-s #investment #portfolios #quarterlyupdate

Lessons Learned from 100 Years of Investing By MFS Investment Management With a century of investing experience, MFS shares key lessons to help clients meet their investment objectives. 1. Fundamentals Matter Understanding a company’s fundamentals—business model, financial health, profitability, and valuation—is crucial for assessing future earnings potential. Question to Consider: Do your managers apply fundamental analysis for long-term growth? 2. Focus on Value, Not Just Price A disciplined valuation approach is key to investment success. Low starting P/Es often lead to higher future returns. Question to Consider: What is your manager's valuation process? 3. Diversification Works Diversification across asset classes, sectors, and regions helps manage risk and drive returns. Question to Consider: Is your portfolio diversified across sectors, regions, and asset classes? 4. Balance Opportunity and Risk Market downturns are opportunities to manage risk and capitalize on price declines. Question to Consider: Are risk management and downside protection central to your managers’ philosophy? 5. Disruption Is Constant Technological changes, like AI, require thorough research and thoughtful investment. Question to Consider: Does your manager have the resources to analyze disruptions across industries? 6. Teams Over Individuals Diverse teams offer different perspectives, leading to better investment outcomes. Question to Consider: Can you leverage your team's collective experience? 7. Time Is an Investor’s Greatest Asset A long-term view helps tune out noise and focus on strategic goals. To read the full article and explore more insights on rebalancing your portfolio, visit BankerOnWheels. This article is part of our Weekend Reading, a curated selection of the best content on lifestyle, investments, and personal finance. Link: https://lnkd.in/ePXzd7gC #InvestmentStrategy #Rebalancing #PortfolioManagement #FinancialPlanning #WeekendReading #BankerOnWheels

The importance of focusing on time horizon Too often, we find investors focusing on what the press puts before them instead of concentrating on issues relevant to their goals. We explain why investment time horizon should be a key focus of portfolio thinking.

When markets get volatile, many investors want to take a more active role in investment management or tend to favor active managers. Some have even heard the adage that active management performs better in times of market turbulence. However, the historical analysis of active US-domiciled equity funds finds no meaningful relation between market volatility and managers’ success rates. https://lnkd.in/gNsuXSjD