Alan Beaney, investment director at RC Brown, notes that the average UK active manager had outperformed their passive peers by roughly 15 per cent in the five years pre-Brexit, mainly because of a bias towards the FTSE 250 index rather than the lagging FTSE 100 index.
But he says: “With the advent of Brexit this trend reversed in spectacular fashion and the index trackers who were lagging are suddenly right at the top, and vice versa. What usually happens is that after such a dramatic out or underperformance by the active or passive fraternity, things have a habit of dramatically reversing – as happened in the immediate aftermath of Brexit. A similar thing happened before and after the dotcom boom but in reverse.
“We do not espouse either solely active or passive investing but try to pick horses for courses and usually have one or two tracker or active quant funds in our portfolios, especially in markets where active managers have had difficulty outperforming the relevant indices.”
Nyree Stewart is features editor at Investment Adviser
