(Harvest) Thinking about investments in terms of beating a specific market benchmark has served many very well in the past, but that does not mean such an approach will be appropriate in the future.‘We are all very wedded to the benchmark and the way that things have been done,’ said Hugh Prendergast, Head of Strategic Product and Marketing, Western Europe and International, at Pioneer Investments. ‘But we believe the future of the active industry is increasingly going to be about delivering function, not relative return.’
This function will be client specific and focused on their objectives, such as achieving a spread over inflation or reaching a set amount for retirement.
Several factors are contributing to this trend. First, in a period of relatively modest economic growth, standard market returns may not be sufficient to meet investors’ needs. ‘The carry we are getting from the beta return is not enough given the risk,’ warned Prendergast.
