Active asset managers are hired by the $1.3 trillion superannuation fund industry so they can differentiate themselves from each other, says Wilson Sy, a visiting fellow at the University of Western Australia who was a senior advisor to the Super System Review.

Sy says the debate on whether active or passive asset management is a long-running saga that has yet to be resolved.

He says a large enough sample of active managers will show their returns are zero or negative relative to the index. The average asset weighted returns of all investors must equal the market capitalisation return, says Sy.

“It doesn’t mean no one can beat the market but someone has to lose,” he says. “The losers either don’t know they’re losing or the institutional investor keeps giving them money.”

Sy spoke on the sidelines of an asset management workshop organised by Ron Bird at the University of Technology’s Paul Woolley Centre for the Study of Capital Market Dysfunctionality.