Active is coming back into fashion

Danny Knight

Danny Knight

Fixed income will continue to struggle should the recovery play out as expected and as such clients will need something a little different if they are to succeed in a broad market environment. 

We have already seen this play out to an extent, with the latest IA figures showing February saw a return to active flows outpacing tracker funds, with much of this activity happening in the fixed income space as investors look for more flexible mandates. 

It is clear, therefore, that diversification is going to play a greater role in the recovery than it did in the lead up to the pandemic.

With bond yields rising and concerns about inflation spikes refusing to go away, investors are now being rewarded for holding a more diversified portfolio and managing the risks that are becoming increasingly present in the market. 

With the recovery ongoing and markets remaining uncertain, advisers will increasingly turn to active to capture as much of that rebound as possible.

Danny Knight is head of investment directors at Quilter Investors