Core Insights - T. Rowe Price's research indicates that active management strategies can enhance core portfolio returns, potentially capturing excess returns that passive index funds miss [1] - Generating an additional 25 basis points (0.25%) in annual returns over 40 years could equate to two extra years of retirement spending, while 50 basis points could add five years [1] - The report emphasizes the opportunity cost of maintaining passive core holdings, suggesting that active strategies can utilize capital more efficiently [1] Active Management Strategy - T. Rowe Price's active core strategies aim for a tracking error of 50 to 100 basis points, allowing for consistent performance relative to benchmarks while enabling diversified stock selection [1] - The strategy avoids large concentrated bets, instead opting for smaller overweight and underweight positions across a broad range of securities [1] - Effective risk management is crucial, involving not only position size control but also guarding against unintended exposures to stocks that may trade similarly due to thematic influences [1] Research Methodology - The firm's approach combines fundamental research from equity analysts with quantitative analysis of historical market data to exploit market inefficiencies [1] - The report highlights that markets often focus on short-term outcomes, leading to price dislocations that can benefit long-term investors [1] - T. Rowe Price's dual-engine design aims to address how markets evaluate company-specific situations against historical precedents [1]

Australian Retirement Trust, the nation’s no. 2 pension fund, is switching more money from passive index funds to active equity managers, citing the growing dominance of major technology companies in global benchmarks https://t.co/n8T7lyqxMj ...

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Renowned economist Peter Schiff dismissed Strategy Inc. (NASDAQ:MSTR) as nothing more than a “highly leveraged” Bitcoin (CRYPTO: BTC) bet on Sunday, arguing against its inclusion in global equity benchmarks. Strategy Not A ‘Real Operating Business,’ Says Schiff In an X post, Schiff highlighted last week’s report by JPMorgan analysts that the company risks delisting from major equity indices, such as the M ...

Core Insights - Active asset managers are under pressure as trillions of dollars are shifting into passive index funds, necessitating adaptation to maintain competitiveness [1] - Some firms leverage their scale to protect legacy assets, while others pursue aggressive acquisitions to expand their franchises [1] Industry Trends - The trend of capital flowing into passive investment vehicles is reshaping the asset management landscape, prompting active managers to rethink their strategies [1] - The competitive landscape is increasingly favoring firms that can either defend their existing assets or innovate through acquisitions [1]