Active comes out on top in FMA debate

Rebecca Thomas

The FMA Debate was held at AUT on Wednesday night.

A team headed by Sam Stubbs argued in favour of passive management. Stubbs said Simplicity aimed to get its member fees down to $30 a year for all members. “Because that’s what it actually costs.”

He said passive management was best because it put more money in investors’ pockets. “It’s not that passive investing gives managers the best outcomes, it gives investors the best outcomes. It’s about making money for them. Passive management makes more money.”

He said many active managers were just “passive management in drag” because they always had one eye on the index trying not to expose themselves by underperforming.