InvestorQ : Is it true that active fund managers across the world have done well in the year 2020?
prachi Patwardhan made post

Is it true that active fund managers across the world have done well in the year 2020?

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sara Kunju answered.
4 weeks ago
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This is a very interesting trend that we are getting to see after a very long time when the active fund managers and the stock pickers appear to have got the better of the quants that are backed by terabytes of data, artificial intelligence and machine learning models. There is finally some good news for active fund managers.

For the year 2020, based on initial suggestions it looks like human fund managers read the COVID tantrums and turbulence better than computer-driven quantitative strategies. Most of the quant programs are designed for normal markets with a specific defined volatility. However, 2020 was an exception in more ways than one.

The good news for active managers is more because after underperforming quants for most years since 2008, active managers finally got the better of the machine driven models. This is not really any indication of how it will be in the future. It perhaps shows that in unusual years human fund managers work better at picking stocks compared to machines.

To an extent, the top performing stock pickers were helped on by tech stocks and start-ups, which had a heady rally in 2020. Volatility helped macro managers too. But the moral of the story was that active managers have proved a point and that should do a world of good to the active managers as passive funds are getting increasingly starved for returns.

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