A New Era of Active Management Looms

Key insights

• The strong returns of passive strategies since the financial crisis have been driven by central bank quantitative easing (QE), but we believe this period is coming to an end. 

• As the impact of QE recedes, returns are likely to fall and cross‐sectional volatility is likely to return. 

• In order to gain from rotation within and between asset classes, investors may benefit from putting active strategies at the core of their portfolios.