Retail investors get passive strategies: Stevens

Smartshares released data showing that, across the four key strategies for New Zealand investors, active managers underperformed in October. Stevens said the same looked to have been true of November, too.

He said a growing number of retail investors clearly understood passive investment strategies, as demonstrated by the growth of platforms Sharesies and InvestNow. They factored in cost as an important part of their investment plans, he said.

“Active managers are talking about how much cash they’re keeping in portfolios at the moment – that’s an expensive way to hold cash.”

Passive investors had got the message that their investments would follow market movements up and down, he said, and were prepared for market turbulence. By contrast, active investors might have higher expectations of their managers - and could be disappointed.