Passive aggressive: the best way to utilise passive funds

FUNDS

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Passive funds have boomed in popularity on platforms but, with the FSA sounding a warning on their use by IFAs, what's the best way to utilise them?

Each month, data from platforms suggests a new investment trend: a boost for fixed income, or burgeoning interest in North America, perhaps. While these tend to come and go, one continued to rise in popularity throughout 2012: investing in passive and index funds. Platforms have been scrambling to react to adviser demand for low-cost alternatives to active funds. Passive funds dominated Nucleus’ inflows leaderboard for 2012, with three of the top five coming from index trackers Vanguard, Dimensional and Legal & General. The pricing clarity provided by the Retail Distribution Review...

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