The Benefits of Active Management: The Power of Choice


Flexible

Ready to adjust to shifting
market conditions.

 

Selective

Focused on finding opportunity,
not executing rules.

 

Responsive

Able to make defensive shifts
when markets stumble.

 


Active + Passive: A Natural Pair

Active and passive, though often talked about as opposites, are in some ways quite complementary. Consider the limitations inherent in index strategies. They provide broad market exposure, but leave investors exposed to the possibility of price declines. And as we’ve seen since the financial crisis, big changes in the macro environment can introduce unexpected concentration risks in traditional benchmarks.

Active strategies, on the other hand, are well placed to address these issues. In declining markets, they may reallocate assets away from risk, and can make adjustments when the macro environment appears uncertain.  What’s more, they can take advantage of short-term mispricing to generate incremental gains.  

Given their complementary traits, a portfolio that combines active and passive offers tantalizing possibilities.  The key is to find a balance that reflects an investor’s goals and which leverages the strengths of both approaches. In addition, it’s important that the active strategies selected are truly active – that they differ significantly from available index strategies – or the investor won’t reap the potential benefit of diversifying between the two styles. 

 

The Choice is Yours

Legg Mason’s diverse line-up of investment managers can help you pursue your goals with active strategies designed to address a wide range of needs.  From traditional equity and core bond funds to unconstrained and multi-asset solutions, we provide a level of choice that few other asset managers can match.  Whether you are an investor or a financial professional, check the links below to learn more about how we can make active work for you and your portfolio.    

 

 

Making Sound Choices

Passive strategies with the same benchmark should generate similar performance. However, active managers in the same asset class may take very different approaches and generate very different results. That’s why it’s important to be selective about what active strategies you hold, choosing from managers with demonstrated expertise and a well-vetted investment process.  


Featured Articles

7 REASONS TO CHOOSE ACTIVE NOW

While index investments have their place, it’s important to recognize what actively managed strategies can do for investors – especially in the current environment, where the risks embedded in passive strategies loom large.

The Tide May Be Turning for Active Management

Volatility has been muted – but that could easily change if reality falls short of expectations, creating opportunity for active managers.

A Bespoke Approach to Unconstrained Investing

Unconstrained fixed-income investing has recently come into prominence due largely to two factors. First is investor desire to avoid having their portfolios tied to benchmarks whose composition may not reflect the optimal or desired components of their investment needs and objectives.

US Equities: New Day Dawning?

Falling correlations between US equity sectors are improving the environment for active managers.


featured products

ClearBridge Large Cap Growth Fund

Western Asset Core Plus Bond Fund

Western Asset Total Return Unconstrained Fund


Featured Resources

Investment Idea

Investment Idea - ClearBridge Large Cap Growth - Let's Get Active

Why investors should consider the actively managed Large Cap Growth Fund.

Investment Idea

Investment Idea - Western Asset Core Plus Bond - Let's Get Active

Why investors should consider the actively managed Core Plus Bond Fund.

Investment Idea

Investment Idea - Western Asset Total Return Unconstrained Fund

Insight on why investors should turn to the Western Asset Total Return Unconstrained Fund.

All investments involve risk, including loss of principal. Past performance is no guarantee of future results.

The information provided on this webpage is not a recommendation or an offer to buy or sell any security.  Illustrations are provided as alternative solutions for consideration by financial professionals and their clients only and are based on QS' proprietary outlook which takes into account certain general investment objectives, modern portfolio theory and market indicators. The hypothetical portfolios discussed are not available for investment. Legg Mason does not make recommendations or conduct suitability analysis. All investment decisions are that of the client and his/her Financial Advisor.