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Active or passive? How five top advisers invest

Top advisers explain their investment preferences

Julian Gilbert, Wealth Matters

Active: 0%

Passive: 100%

Gilbert prefers passives because they offer better value than active funds. ‘We used to have an active fund that was doing really well, but the fund charge was around 1.15%, while Vanguard’s passive equivalent charged 0.15%,’ he says, doubting whether a fund manager can beat Vanguard every year by 1% without question.

Julian Gilbert, Wealth Matters

Active: 0%

Passive: 100%

Gilbert prefers passives because they offer better value than active funds. ‘We used to have an active fund that was doing really well, but the fund charge was around 1.15%, while Vanguard’s passive equivalent charged 0.15%,’ he says, doubting whether a fund manager can beat Vanguard every year by 1% without question.

Ed Fairey, Fairey Associates

Active: 21%

Passive: 79%

Fairey favours passives such as Vanguard trackers, which he describes as ‘ludicrously’ cheap. Despite this he says passives would be no good in a downward market and are largely there to ‘make room for the 1% ongoing adviser charge’.

Andy McLaughlin, Astute Wealth Management

Active: 50%

Passive: 50%

Clients of Astute will typically hold a blend of lower-cost portfolios, such as Vaguard LifeStrategy, and an outsourced discretionary model portfolio to diversify active and passive management. ‘We don’t believe one is better than the other,’ McLaughlin says.

Ailsa Brown, Gilliland Neilson Brown

Active: 80%

Passive: 20%

Brown favours on an active approach to investment, as she believes the returns with outperform passive over the long term. ‘They’re slightly more expensive than the passives, but some of the passives are priced too highly for what they do,’ she says.

Lisa Hardman, Investing Ethically

Active: 100%

Passive: 0%

Investing Ethically offer bespoke portfolios and screen funds in-house. Hardman says software could be used to choose some ethical funds but that would not reflect the many complex decisions advisers help clients make.

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Investment

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