TIME IS AN ASSET

While the bull market has favored passive investing, active management is best aligned with investors' long-term goals.

Investors' misperceptions about what impacts their outcomes often make them spend too much time measuring what doesn't matter and not enough time on what does. It's time to start looking at what really counts when choosing an investment manager.

How does investor tolerance for underperformance line up with their understanding of a long-term perspective? Our Active Sentiment Study looked at their thoughts, behaviors and the connections between the two.

Given the powerful relationship between decision-making and time, a misalignment between the two can significantly impact investment outcomes. It's time to break through that disconnect – and better align asset management delegation decisions with investor time horizons. 

The S-curve, which shows the growth trajectory of a company creating a new product or even a new industry can be an ally or enemy for investors. Skilled active managers try to find these companies much earlier on in the curve, with an eye toward tapping greater growth potential. 

With investor challenges growing – shorter horizons, cost sensitivity and tighter investment constraints – active managers must adapt their approach to meet these demands. 

We are proponents of a benchmark-aware approach to fixed income investing that provides important risk management discipline while addressing some of the issues associated with passively tracking an index.