The fund is effectively a passive fund (i.e. tracks the index) but the team believe they can enhance the performance. These types of funds are gaining in momentum. The idea is that it sits between passive and active. The team construct the portfolio based on their analysis so although it will be similar to the index, elements of it will be different and that is where they believe they can add value.
We still feel the jury is out on these strategies although this one has been in place for 25 years and has the largest team in continental Europe running it. The argument is that a pure passive strategy will be driven towards favoured factors (for example value, momentum, quality, growth) whereas with the enhanced strategy they can reduce down the risk….read more