Podcast episode #25: Was 2022 the year for active or passive approaches to shine? With AJ Bell’s Laith Khalaf

by | Jan 10, 2023

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In this week’s IFA Talk podcast, we’re talking investment. In particular, we’re looking at the relative performance of active and passive funds throughout 2022 – and we’ve certainly got a few surprises in store for you. 

However, we’ve got the right person to talk to about this age-old debate. And it’s Laith Khalaf, AJ Bell’s Head of Investment Analysis. Laith is the man behind some detailed research which AJ Bell carried out late last year so we thought we’d like to talk to him to find out more. 

Spoiler alert: Laith has described 2022 as an ‘annus horribilis’ for active funds – probably a fair description when we consider AJ Bell’s latest ‘Manager versus Machine’ research found just 27% of active funds had beaten a passive alternative in 2022 – down from 34% in 2021. Things do look a bit better for active managers over ten years though, where 39% have outperformed a passive alternative, down from 56% in their 2021 report. 

But why? In today’s conversation Sue and Brandon discuss with Laith some of the reasons behind the data, as well as: 

 

· Why only 13% of UK active equity funds outperformed a passive alternative in 2022, thanks to higher mid and small cap exposure 

· How US active managers have had a relatively good year, with 40% outperforming 

· Highlighting how UK investors in the S&P 500 have been given a get out of jail free card by weaker sterling 

 

· The need to shop around: the most expensive UK tracker fund is 21 times more expensive than the cheapest. We discuss how charges really do matter 

Check out the conversation HERE…

Click here to listen on Spotify 

 

Click here to listen on Apple Podcast 

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