The importance of passive investments continues to grow. They enable investors to invest quickly, cost-effectively, and supposedly without disadvantage in different asset classes, regions, or segments, even if underlying securities are not very liquid. However, their growing importance is leaving its mark on the behaviour of the overall market and individual securities. Passive investments are one of the drivers of the continuously changing market structure. With a focus on equities, we high-light the key implications of passive investing that investors need to be aware of. However, many findings also apply to bond markets. For active investors, this de-velopment also creates opportunities.
Authors
Ulrich Urbahn
Ulrich Urbahn has been working for Berenberg since October 2017 and is responsible for quantitative analyses and the devel-opment of strategic and tactical allocation ideas, and is involved in capital market communications. He is a member of the Asset Allocation Committee and portfolio manager of the Berenberg Variato. After graduating in economics and mathematics from the University of Heidelberg, he worked for more than 10 years at Commerzbank, among others, as a senior cross asset strate-gist. Mr Urbahn is a CFA charterholder and was part of the three best multi-asset research teams worldwide in the renowned Extel survey for many years.
Multi Asset Flexible
Benefit from a flexible multi-asset strategy with a focus on individual ideas. Strategic long-term positions in attractive capital market segments, especially niches, are supplemented by short-term oriented thematic as well as opportunity-driven positions. Investments are made across all asset classes and regions - deliberately detached from any benchmark and therefore, not based on pre-defined bandwidths for individual asset classes. On portfolio-level, a comprehensive risk overlay is applied on the basis of sensitivities to key risk factors.
