Index funds have had a nice run since 2008, but actively managed funds will soon have their revenge, said Richard Yasenchak, Client Portfolio Manager for INTECH. Yasenchak added that passive investing has actually been proven to be an inefficient means of deploying capital because it favors mega-cap, overvalued stocks, while active investing has the ability to rebalance as needed. He also said that passive investing is not truly passive because investors and managers are actively wagering that active management is going to remain out of favor. Furthermore, Yasenchak said INTECH’s research has shown that active beats passive in modestly rising markets and down markets and tends to underperform in sharply rising markets.
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