Asian investors tilt towards active investing

Institutional investors view actively managed funds as the most profitable instruments for long-term investment, according to a survey conducted this month by Dutch fund manager Robeco and AsianInvestor.

‘Actively managed investment funds’ was by far the most popular answer given, from 50% of respondents, followed by ‘absolute-return investments’ (33%) and thematic investment funds (29%). ‘Index-tracking/exchange-traded products’ was down in fourth place with 28%, with hedge funds even less popular, at 20%.

This comes as a surprise to Henk Grootveld, co-portfolio manager of Rolinco, which invests in thematic equity strategies offered by both Robeco and SAM.

“I found it shocking to see [this result], because most people in the world are very much focused on passive, index-orientated investing,” he says. “So the fact that people see active investing as the best way to make money – yet are not investing that way – means there’s a shift in that direction.

“That's good, because you won’t make a lot of money just looking in the rear-view mirror and copying what the index is doing,” argues Grootveld. “You have to think ahead about which asset classes and companies are going to solve the problems of the world and make a profit out of it.

“Most institutional money is managed passively – very close to the benchmark, rather than looking at which companies or asset classes will suit your needs best.”

For the next 12 months, meanwhile, investors see the most dominant investment trend being a ‘focus on absolute return’ (36% of respondents gave that answer). But only 5% answered ‘passive investing’ to the same question. (See here for more analysis of the responses to this question.)

*The survey of 216 institutional investors was conducted in conjunction with AsianInvestor in early October. The full results and write-up will appear in the upcoming November issue of the magazine.