Actively managed funds lead the way for 2012

Almost eight in ten (79%) IFAs plan to invest in actively managed funds in the next 12 months, according to research from Legal & General Investments.

The findings come from Legal & General Investment's What Matters Investment Index which investigates IFAs' views of the market over the coming year.

When asked the extent to which they were likely to invest in active or passive funds, passive investments fell far short of their active counterparts with only 31% planning to invest in them over the next 12 months.  It was found that more than half of the advisers polled (52%) said that they were "very" or "somewhat unlikely" to invest in passive funds in the next 12 months.

Interestingly, when identifying which type of fund they currently invest in, 57% invest in actively managed funds alone.  Additionally, a quarter (26%) mix both active and passive and 5% invest in passive alone.

Simon Ellis, Managing Director, Legal & General Investments, said:  "It is interesting to see a pick up in intentions to use active funds. There are many commentators expecting a shift to index funds after RDR in 2013, but the signs are that IFAs are already adopting these funds as part of their portfolio planning.  In some cases even going totally passive.

At Legal and General Investments we strongly believe it is a case of  ‘horses for courses', meaning that mixing active and passive funds is appropriate depending on whether you just want beta in a certain asset class or believe an active manager can sustain outperformance of the index.  It's certainly not a black and white choice." 

The Legal & General Investments What Matters Investment Index aims to investigate the future expectations of the intermediary market.