Moneywise readers favour active funds over passive trackers

6 March 2017
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The majority (35%) of Moneywise.co.uk users include a mixture of both passive and active funds as part of their investment strategy, our latest poll results reveal.

But when it comes to using just one style of investing, active wins with 27% of those who voted saying they only use active funds, and just 14% saying they only use passive funds.

Active funds are professionally managed by a fund manager who selects the underlying investments. Passive funds – also called tracker funds – aim to replicate the performance of a stock market index, such as the FTSE 100.

Active funds do however, typically cost more, and interestingly, the tracker funds selected for Moneywise’s First 50 Funds list beat the performance of the active funds on the same list during 2016, with average returns of 19.4% compared to 10.3%. 

 

That said, Moneywise suggests investors mix both approaches in their portfolios, using low-cost passives for the core of their portfolios and then adding in satellite active funds to try to enhance performance.

The poll results also reveal that 11% don’t use funds as part of their investment strategy – presumably investing directly in stocks and shares or in vehicles such as Venture Capital Trusts (VCTs). (See our sister magazine, Money Observer, for its analysis of where VCT investors should look in 2017.)  

Meanwhile 13% don’t invest at all – presumably favouring cash savings.

 

View the pie chart below for the full poll results (click to enlarge).

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