Which option is superior: Passively managed ETFs or actively managed funds?
In a recent panel discussion at the Finance Summit, investment experts Jessica Schwarzer, Chris Hofmann, and Vincenzo Vedda, moderated by Frank Stocker, shared their insights on investment strategies.
Vincenzo Vedda, DWS Group's Chief Investment Officer, warned against the U.S.-heavy orientation of many Exchange-Traded Funds (ETFs) and advised diversification. He emphasized that especially passive ETFs that mimic the market are currently very U.S.-heavy, and investors should be cautious.
On the other hand, Schwarzer, a financial journalist and author of eight books, believes that if one prefers broad diversification, ETFs are a great choice. However, as the investment goal becomes more specific, she believes a fund manager can make a bigger impact. She primarily uses ETFs for her own retirement planning.
Hofmann, a well-known figure in the investment world, suggests seeing ETFs as a "building block" and building a mixed portfolio. He advises that comparing a Germany fund with a DAX ETF is fundamentally wrong. He also tips individuals to set a goal, create a savings plan, and stick to it.
Vedda also suggests combining passive and active elements in one's portfolio, especially in times of market volatility. He states that there are definitely categories where it makes sense to invest passively, but the choice of a specific fund, even within ETFs, is an active decision.
The panel also discussed the popular "Passive ETFs or Active Funds - Which Strategy Delivers Better Results" masterclass. ETFs passively mimic a market index, while active funds have a fund manager who invests according to a set strategy.
It's worth noting that funds have become popular among young people. Those who wish to invest in Germany have options including stocks, real estate, commodities, private equity, or funds. Well-known ETFs include the MSCI World and the S&P 500.
Jessica Schwarzer also stressed the importance of aligning one's investment strategy with personal goals. She recommends that investors should consider their risk tolerance, time horizon, and financial objectives before making any investment decisions.
In conclusion, the panel at the Finance Summit highlighted the importance of diversification, the role of active vs. passive funds, and the need to align investment strategies with personal goals. The experts emphasized that making informed decisions is crucial when it comes to investing, and understanding the various options available is key to achieving one's financial objectives.
