Active versus passive: What really matters for bonds

The discussion about "active vs. passive" has been intensive for many years. So far, the focus has mostly been on equities. However, the discussion is now spreading to the bond side.

In the context of the stock markets, this is mostly due to the strong growth in volume and the strong diversity of passive products, especially exchange traded funds (ETFs). However, the discussion is now also spreading to the bond market. Even though the security class of bond-based ETFs is still quite young, their total volume reached 1 trillion US dollar at the end of last year. The question whether an active fund manager can beat its corresponding benchmark or an ETF derived from it is likely to be increasingly discussed across asset classes from now on.

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