latamen

Passive investing

Passive investing is following a market-weighted index without deviating from it to achieve extra returns (alpha). Investors thus obtain the index returns adjusted for costs.

In the case of active investing, trackers – also referred to as ETFs – are often selected. Investors use a tracker to follow a stock or bond index.

A passive approach has advantages and disadvantages. Passive investors enjoy low management costs and low trading activity, but this is accompanied by a major disadvantage. Using the passive approach, investments are also made in those segments of the market that are characterized by an unattractive risk-return ratio. Take high-volatility equities, for instance. In an active approach, investors can avoid these segments and focus on the attractive parts of the market.

Quantitative investing: invisible layers surface to deliver attractive returns
Quantitative investing: invisible layers surface to deliver attractive returns
Read more
The rising tide of Value won’t lift all boats equally
The rising tide of Value won’t lift all boats equally
The recent Value upswing has provided renewed hope of a comeback and ideal conditions for deep and consistent exposures to the style.
25-03-2021 | Insight
Data sets – factor investing in corporate bonds
Data sets – factor investing in corporate bonds
A research-driven approach is at the core of everything we do.
01-03-2021 | Data sets
Spring has to come simply because economic fundamentals require it
Spring has to come simply because economic fundamentals require it
How do you perceive the quant equity winter?
26-02-2021 | Interview