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2025: The Year of Active Management?

2025-02-12

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Can active management truly outperform passive management this year?

Discover why it could be the key to a thriving portfolio.

In the world of wealth management, one question frequently arises: Should you prioritize active or passive management for your investments?

While passive management, which relies on low-cost index funds, is often popular with investors seeking simplicity and cost-effectiveness, a growing body of data is challenging this approach.

According to the latest data from Bloomberg, 9 of the 10 best-performing funds in 2024 were actively managed. The numbers speak for themselves: active management appears to have a real advantage, even when management fees are factored in. This is all the more striking given that giants like Fidelity dominate the rankings of top-performing funds with their selective active management.

So why does active management continue to outperform passive funds over the long term? Unlike passive management, active management involves rigorous investment selection and management based on economic conditions and market opportunities. Active fund managers make strategic decisions to maximize returns by adjusting their portfolios as markets evolve, paying particular attention to risks related to currency fluctuations and tariffs.

This can translate into better performance, especially during periods of volatility or uncertainty like the one we are currently experiencing.

It is important to emphasize that, even with active management, the key to a high-performing portfolio lies in diversification. This applies not only to asset classes but also to management styles. A well-diversified portfolio helps reduce volatility, mitigate the risks of geographic and sector concentration, and protect capital against unforeseen events, ultimately optimizing returns.

Beyond the numbers, the question arises: what is the best strategy for your portfolio, given your long-term goals and risk tolerance? It is crucial to remember that there is no one-size-fits-all solution, but rather a strategy that must be tailored to your specific needs. Active management, well integrated into a diversified portfolio, could be the missing piece to maximize your returns and navigate tomorrow’s markets effectively.

Source: Winkler, M. A., 2025, America’s Best Stock Picker Keeps Beating Passive Funds, Bloomberg, retrieved January 24, 2025,

Writing and research by Jonathan B.Therrien, Wealth Advisor for iA Private Wealth Inc.

This information was prepared by Fabien Major, who is an investment advisor for iA Private Wealth Inc., and does not necessarily reflect the opinion of iA Private Wealth Inc. The information in this text comes from sources believed to be reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on analysis and interpretation as of the date of publication and may change without notice. Furthermore, they do not constitute an offer or a solicitation to buy or sell the securities mentioned. The information contained in this document may not apply to all types of investors. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. iA Private Wealth is a trademark and a trade name under which iA Private Wealth Inc. carries on business.

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