On the topic of whether wealth managers could or should adopt a passive asset allocation strategy, Gumpel advocates for a best of both worlds approach.
Passive funds have proven to be more successful in squeezing value from specific types of equity markets – the US, for instance, he said.
But he thinks the idea of a passive fund that invests in bonds, property or alternatives is flawed.
“If you are trying to run an asset allocation strategy by just using passives, you don’t have many clubs in your bag.
“Whereas if you are using a combo of active and passive and using each of them in the area where they outperform and add value, actually, you’ve got all the tools you need.”
