- Passive funds can reach far and wide – but not everywhere
- We look at the market segments neglected by mainstream indices
Despite many seeing them as the ideal hunting ground for stockpickers, falling markets have done little to dent the appetite for passive funds in the past year. Trackers took in nearly £10bn in net retail sales in 2022, meaning they now represent some 21 per cent of the industry assets monitored by the Investment Association.
This popularity, built during the previous decade, is understandable when you consider the good returns passives have delivered for much of that time. They also tend to offer a decent level of diversification in many cases. Having said that, some of the most widely owned trackers offer skewed exposure to their underlying markets, given their particular focus on the winning names and the fact that certain segments are left sorely underrepresented. So filling some of these gaps with other funds, both active and passive, can help add an edge to your portfolio.