Active investing back in focus
The current ‘new normal’ of investing has brought active investing back in focus due to its flexibility and agility which become a competitive advantage at volatile times, boutique investment firm Datt Capital said.
According to Datt’s managing director and chief investment officer, Emanuel Datt, passive or index strategies worked well in bull markets, and the opposite was the case in bearish or choppy markets, as active management could use a multi-asset investment approach which reduced downside risk and volatility.
“The current ‘new normal’ of investing has brought active investing back in focus,” he said.
“The COVID-19 pandemic has pulled the reins on economic activity and impacted performance of financial markets. When markets become volatile, the agility and flexibility of active management can become a competitive advantage. In this scenario active managers can, no doubt, accentuate the returns of a passive portfolios whilst reducing risk.
“As a result, we have frequently made discretionary investment decisions for the benefit of our fund’s performance, ultimately supporting investors in the Datt Capital Absolute Return fund. We reduced market exposure as the markets trended down, whilst increasing exposure at a time when prices were opportune. Accordingly, we realised less market downside, capturing more than the market's upside.”
The Datt Capital Absolute Return fund provided a net return of +11.82% and achieved a 12-month rolling return of +41.41% vs a fall of -5.08% for the ASX 200 Total Return Index over the same period, the firm said.
The fund benefitted from its exposure towards precious metals in August, with gold remaining stable at almost record high prices and silver appreciating significantly.
AUTHOR
Oksana Patron
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