Active management has seen a boost in the last year from the interest in ESG funds and the increasing conversion of mutual fund strategies to active ETF counterparts. Peter Lynch thinks the fundamentals have always been strong for active investing and believes that those who are making the move to passive investing are missing out, reports Bloomberg Wealth.
Peter Lynch is a former Fidelity Magellan fund manager who grew the firm’s assets under management from $14 million to $18 billion before his retirement at the age of 46. Lynch’s stock picking prowess was widely regaled within the industry; over the course of the 13 years that he was at Magellan, he made annualized returns of 29% for his investors.
“The move to passive is a mistake,” Lynch said in an interview with Bloomberg Radio’s Baystate Business to be broadcast Tuesday. “Our active guys have beat the market for 10, 20, 30 years, and I think they’ll keep on doing it.”
Lynch believes that the market and appetite for active management are still very much present and points to the success of several of his former firm’s mutual funds as an example. He is currently working part-time as the vice chairman of Fidelity Management & Research Co, and he mentors young analysts. He still has his thumb to the pulse of Wall Street and firmly believes in the potential within active management performance.
Active management offers flexibility, responsiveness, and better risk management in changing market environments with shifting risk appetites of investors. By gauging overall market sentiment and risk appetite, active managers are able to work to outperform their passive benchmarks, particularly in times of changing investor risk appetite. Active management firm T. Rowe Price eight different actively managed ETFs with a variety of strategies for investors.
The firm brings a bevy of experience and research to its products, with portfolio managers averaging over 20 years in investing each, as well as over 400 investment professionals dedicated to researching companies within ETFs.
For more news, information, and strategy, visit the Active ETF Channel.