Rory Maguire: Could smart beta really replace active management?

Cause and effect not so clear

clock • 3 min read

As computers grow ever more powerful, the rise of smart beta strategies may seem inevitable but, argues Rory Maguire, there are some very human reasons to think it might not be

Over the past year, we have found ourselves increasingly being asked whether smart beta could replace traditional active management and so drive down investment fees. Computer-generated portfolios, the argument goes, could create strong alternatives to managers with a proven and predictable stylistic bias, such as Fundsmith or the Schroder Recovery team. The availability of ‘quality' and ‘deep-value' smart beta products would suggest their providers certainly think this is a possibility. Another strong argument is that we live in a world where there is so much data for humans to proce...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

China: Beyond trade tensions and tariffs

China: Beyond trade tensions and tariffs

'So what do you think about China?'

Gabriel Sacks
clock 05 December 2025 • 4 min read
As good as... Should investors rely on gold to protect portfolios during market dips?

As good as... Should investors rely on gold to protect portfolios during market dips?

'Gold is often bought more on hope than expectation'

James Flintoft
clock 04 December 2025 • 3 min read
Darius McDermott: The uncertain future of the US dollar

Darius McDermott: The uncertain future of the US dollar

'Investors need to be aware of the potential vulnerability of the dollar'

Darius McDermott
clock 03 December 2025 • 5 min read