CHICAGO, June 15, 2017 /PRNewswire/ -- CFA Society Chicago assembled ten leaders in the investment management industry, to participate in a special debate event, "The Active vs. Passive Debate: Trends, Insights, and Case Studies." Over the course of the evening, participants shared their perspectives in an often contentious debate to a sold-out crowd at Chicago's Standard Club.
During the evening's keynote interview, Nobel Laureate Eugene Fama, an economist at the University of Chicago Booth School of Business, defended his foundational "Efficient Market Hypothesis," on which passive management is based.
"Market efficiency today remains the most well-supported idea in the history of economics," Fama said. "It's a matter of arithmetic, not of hypothesis."
Offering advice to investment advisors in the audience, Fama advocated for a holistic approach to meeting client needs. "Managers need to focus on providing a full range of products – not just investment products, but wealth management products like estate services, even tax services."
During two panels and a keynote featuring passionate defenses of opposing financial models, the speakers did manage to agree on several core principles:
- Increasingly, "active" and "passive" are not clearly defined, as active managers will use passive investments as part of their process.
- Factors such as personal savings and risk/return profile outweigh the difference between an active or passive approach in terms of building wealth.
- The rise of passive has led to downward pressure on fees for all products, providing more return overall.
"Now more than ever, our industry is preoccupied by this debate between active vs. passive management," said Shannon Curley, CFA, CEO of CFA Society Chicago. "Amidst all of the debate last night, what really stood out was the one question it all kept coming back to: how are we improving the lives of our clients? In the end, that's the purpose of any investment strategy."
For more, stream the recorded webcast of the debate.
CFA Society Chicago
CFA Society Chicago, www.CFAChicago.org, aims to lead the investment profession by promoting the highest standards of ethics, education, and professional excellence; to shape an investment industry that serves the greater good; and to serve as the premier local resource for Chartered Financial Analyst designees, candidates, other investment professionals and our communities. Founded in 1925, CFA Society Chicago has more than 4,500 members and is the world's oldest investment analysts' society.
CFA Institute is the global association of investment professionals that sets the standard for professional excellence and credentials. The organization is a champion for ethical behavior in investment markets and a respected source of knowledge in the global financial community. The end goal: to create an environment where investors' interests come first, markets function at their best, and economies grow. CFA Institute has more than 113,000 members in 140 countries and territories, including 102,000 CFA charterholders, and 137 member societies. For more information, visit www.cfainstitute.org. (Bloomberg users can find CFA Institute at 497458Z.)
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SOURCE CFA Society Chicago