DALBAR ANNOUNCES ACTIVE VERSUS PASSIVE ANALYSIS – DOES PASSIVE PERFORMANCE OVERCOME INVESTOR BEHAVIOR
(February 27, 2017) DALBAR Inc. announced the release of its analysis of active and passive investing
and how these approaches affect the returns investors earn. Following its long tradition of looking
past theoretical investment statistics, DALBAR has measured the impact these investments have on
DALBAR’s Investor returns show no clear winner.
Over the longer terms, active investments produced better results, reflecting the tendency for
investors to remain invested for longer periods. Shorter term results show passive investments
ahead, driven in part by the unexpected post-election run-up in the markets.
The explanations for why active investments caught up with the superior investment statistics of the
passive funds include better investor retention during market downturns, asset allocation and
capital preservation strategies of active investments.
The study also points out the unregulated and unaccountable nature of the indices that are tracked
by passive funds.
The study concludes that the choice of active or passive investing should be based largely on the
needs and preferences of the investor and the cost of providing asset allocation and capital
preservation strategies that are not available in passive funds.
DALBAR, Inc. is the financial community’s leading independent expert for evaluating, auditing and
rating business practices, customer performance, product quality and service. Launched in 1976,
DALBAR has earned the recognition for consistent and unbiased evaluations of investment
companies, registered investment advisers, insurance companies, broker/dealers, retirement plan
providers and financial professionals. DALBAR awards are recognized as marks of a superior standard
of care in the financial community.