The ideal role of active manage­ment in super fund portfolios is to take decisive bets away from the benchmark, leaving risk management to indexers and asset allocators. But neither mode of investment management will win the active versus passive war because of their competitive interests, the appeal and elusiveness of true alpha, and the need for both in an efficient portfolio. “Will we always have everything active? Sometimes there might be fewer opportunities and a role for passive management,” says Hartley at Sunsuper. “If we were to get very, very big, it would make it hard to get value out of portfolios with only active managers.”

To read the rest of this article, please subscribe to Investment & Technology magazine.