Innovative factor definitions and combinations are designed to overcome frequently overlooked risks and structural shortcomings associated with passive investing
. PLC, PSM, and PDEV combine three distinct factors-shareholder yield, momentum, and quality growth-to enhance investors' risk/return profile.
Hollands also points to the significant growth of passive investing
as a reason for the outperformance of growth, because index investing only takes into account the market cap of companies, rather than underlying fundamentals.
Certain data has also shown that indexing (or passive investing
) may provide more consistent returns for some investors when compared to actively managed open-end mutual funds.
Speaking on the 'Indices and Passive Investing
' panel, Noura AlAbdulkareem, Acting Head of Markets, Boursa Kuwait, highlighted new developments in the Kuwaiti capital market, including upcoming market reclassifications.
The hotly-tipped start-up, which recently raised $1.3 million in an early stage funding round, claims to combine fully digital, low-cost wealth management services with the philosophy of passive investing
. It is part of a wave of robo-advisory platforms that recommend portfolios built on lower-fee charging passive funds to investors based on their risk appetite.
, or the strategy of tracking a basket of assets or an index instead of actively buying or selling stocks, is gaining traction globally and changing the regional trading landscape, an investment expert from Swiss investment bank UBS said.
Vanguard founder Jack Bogle started the debate of active versus passive investing
when he created the first index fund in 1975.
Assuming that the median investor earns the same as the market returns, passive investing
should outperform half of all active money managers within a market or sector.
Blurring the line between active and passive investing
. The second generation of ETFs also saw the rise of funds that seek to outperform their market index rather than simply replicate it.
It allows self-directed investors to choose from three exchange-traded fund (ETF) or three mutual fund portfolios, based on the investor's self-identified risk tolerance, time horizon, and preference for active or passive investing
. Highlights include:
THE RISE OF PASSIVE INVESTING
AND THE IMPORTANCE OF STOCK 1197
MEIRA also highlighted on the rise of passive investing
, a trend which is significantly impacting stock markets in the Middle East.