Why it is a Mistake to Think There is Only Active or Passive Investing

There is an entrenched belief among many clients that there are only two types of investment behaviour, either active or passive.

Furthermore, a growing number of investors feel that passive investment – with the increasing prominence of exchange-traded funds – is the answer to everything that came before. This is simply not the case.

Emily Roostan, director at Affinity Capital, acknowledges that both active and passive investments can benefit investors if they are approached in the right way.

“There are many uses for passive investments and I think the birth of the hugely efficient ETF market is phenomenal,” she explains.

“I will add that I have come across some truly fantastic actively managed funds in my time that offer a real edge that an investor would not be able to capture on their own.”

Emily nevertheless argues that the idea investors can only choose between these two approaches is a fallacy. There are other options open to clients who are willing to consider new avenues.

Specifically, the flexibility of structured investments allows clients to straddle the divide between cash, active and passive investing. This is particularly true if investors want to be very hands-on in regards to their portfolio.

How Affinity can help

Affinity Capital is an independent financial boutique with expertise in the area of structured investments and derivatives. We believe that many investors are missing out on a valuable opportunity to diversify their holdings and benefit from an asset class that can perform well in today’s volatile markets.

“Look beyond the traditional and widely marketed investments out there and open your horizons to the prospect of structured investments within your portfolio,” Emily advises.

“The efficiency with which access to markets can be achieved through structured investments might just allow your portfolio to get that much closer to the efficient frontier, thereby making your overall portfolio more effective.”

Forming strategic partnerships with independent experts is often the key to maximising the returns achieved through structures, especially for investors that are not familiar with the asset class.

At Affinity, we can provide a range of services that add value across the lifecycle of a trade, whether it’s structuring and administration or booking, settlements and after-trade care maintenance.

Not only this, our company is on-boarded with all the top investment banks worldwide, bringing clients unrivalled choice and competitive pricing.

To learn more about Affinity Capital’s offerings, please contact us on 020 7297 2816 or email at enquiries@affinitycapital.co.uk.