7IM US Equity Value Fund

The idea is to apply a ‘smart’ process to the strategy using a system developed and tested by Alessandro which aims to outperform a traditional passive funds, yet retains the low costs.

We know that the US market is extremely difficult to call, and certainly in the last five years there has been a strong argument that investing purely in a fund that tracks the index would have done as well as an actively managed fund. By actively managed we mean a fund manager who picks specific investments.

However, there is an argument that this could change over the next five years as certain sectors (i.e. oil) will drag down the sector as a whole and therefore picking the best will deliver better returns.

Additionally, there are active managers focusing on certain sectors like small and mid-cap who can outperform the market. However, for those just investing in US large cap what are the best options. Is it possible to hold onto the low cost passive fund charges but get performance close to active managers?

We have seen recently the introduction of Smart Beta /Passive Funds, these effectively aim to capture the out performance of active funds with the low charges of passive funds.

In this update we talk to Alessandro Laurent, of 7IM, who has set up a range of Smart Passive Strategies. In particular, we wanted to focus on the US strategies but the process applies to Emerging Markets, Europe and the UK.

Fund Facts Morningstar


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