one that has the potential to generate the greatest amount of return over the long term. Hard facts aside, active and passive management are in many ways similar to political parties. The two camps see the investment world in very different ways, both making logical and passionate arguments for their viewpoint.
One could take the position of a hybrid active/passive equity portfolio management styles, but such styles really are variations of active management philosophies. Similar to traditional active management, hybrid-style managers invest to find undervalued sectors or securities. And from time to time, one approach will be more popular than the other.
As an individual investor one should try to ignore the trend of the moment. When all is said and done, keep in mind that both active and passive managers are selecting investments from the same pool of equities.
* The writer is an associate professor in finance and accounting at IIM Shillong