Investors are weighing active portfolio management over passive, new research from Quilter Investors has shown.
Some 54% of investors said they would prefer knowing their portfolio was run by a team of professionals, compared to just 8% who feel comfortable letting a computer look after their money.
The research also found that investors continue to see diversification as a positive, despite recent returns being driven by a handful of technology companies.
Three quarters (74%) said they considered spreading savings across a range of asset classes as fairly or very important. A further 41% said knowing their investments were well diversified gave them the greatest peace of mind, versus 8% who said backing a few leading companies and 5% who said investing in one leading sector would have the same effect.
Danny Knight, head of investment directors at Quilter, said: “Given the active vs passive debate has been raging for years it is interesting to see investors have considerably more confidence in active management.
“We are at a point in markets where we feel active management should thrive. Inflation and interest rate concerns are hampering bond yields, while we appear to be undergoing somewhat of a rotation in performance drivers for markets. As a result, actively managed portfolios have a great opportunity to add real value to clients by offering flexibility and being able to capture style changes as they happen.
“That is not to say passive does not have a place within a portfolio. There are a number of passive solutions that will give investors exposure to markets where the probability of an active manager outperforming is low, or where there are shorter term tactical opportunities.”
Knight said it was “encouraging” to see investors continuing to recognise the benefits of a diversified portfolio.
Knight added: “The phenomenal run by the tech giants will have caused many to feel they have missed out on big gains, but as returns in recent months have shown, things can change incredibly quickly.
“Diversification has proven to be of huge benefit to clients not just from a return and risk perspective but also the journey they go on to get there. For a lot of retail investors, it is often about the ride as much as it is the destination.”
