Despite the rise of passive investing and the concentration of performance in a handful of stocks, there remains significant opportunity for active managers according to Elston Asset Management co-founder and portfolio manager, Andrew McKie.
“I still think that you've got plenty of opportunities as an active manager”, says McKie, before going on to highlight two salient reasons why.
Firstly, the performance of the top 10 companies changes significantly from year to year, notes McKie, adding “If you look at last year, the banks do well, resources do poorly. If you look further back, you'd say CSL was a hero of the index at 14% of the index and then has de-weighted from there.
"Even within the larger companies, you can get quite a difference in relative performance year to year", says McKie
The second reason for optimism from an active manager’s perspective is that outside of the top 10, there are some high-quality businesses that, at the moment, are perhaps getting overlooked.
"There are some fantastic businesses and it's quite a big active position in the portfolio when you get outside of that top 10.
"I think there's a fundamental opportunity when you look a little bit broader from that concentrated index, the passive equation", says McKie.
5 окт 2024
