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Part 4: Choosing an Active Strategy

Sponsored by Lockwood | When ranking the relative importance of various investment characteristics when choosing an actively managed fund, advisors are most likely to focus on the fund’s expense ratio and the fund firm’s reputation.

When ranking the relative importance of various investment characteristics when choosing an actively managed fund, advisors are most likely to focus on the fund’s expense ratio and the fund firm’s reputation. These preferences were not consistent across all advisor channels, however. In particular, advisors from large firms ranked a fund’s upside/downside capture (61%), relative return (59%) and risk-adjusted return measures (57%), along with a number of other factors, ahead of expense ratio (43%) and firm reputation (53%). Meanwhile, advisors from independent firms said expense ratio (55%) and firm reputation (51%) were the most important factors when considering an active strategy.

NEXT: Indexing Strategies

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