"Passive strategies enjoy the benefits of rising markets but suffer when markets do. An active strategy, however, obviously faces challenges when markets trend downwards but the impact can be limited by active decisions such as reducing market exposures, adjusting asset class and geographic weightings or emphasising more resilient companies.
"Third is the potential for harnessing volatility, either to harness returns or protect capital."
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David Thorpe is special projects editor at FTAdviser
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