Now is the time for active investing to prove its value

TO START with, my cards are on the table: I run an investment business where we charge fees for the decisions we take with clients’ money.

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So you will not be surprised that I am a fervent believer in the value of active investment management.

I also value “passive” or tracker investments, which can offer low-cost, broad portfolios that passively mirror major market or indices such as the MSCI World or the S&P500. There is a place for these. In 2014 Warren Buffett famously advised that his wife’s money should go into a tracker fund, and I’d agree: everyone’s portfolio or ISA should probably contain some passive holdings as a source of cost-effective diversification.

I do take issue, however, with those who claim that active investing - which has grown hugely in recent years - will everywhere be exposed for active investment oversight, i.e. monitoring where decisions are underpinned by fundamental research, is key to effective “price discovery” - the process through which markets attribute value to assets.

All investment should rest on deliberate decisions, including consideration of risk.