Passive investing has gained popularity among investors recently, but there is still a place for active fund management, said Barings Chairman and CEO Thomas Finke.

“Passives have grown so dramatically in the last decade that there’s this feeling they will overtake everything,” but a balance of assets is important, Finke added.

Barings, part of the MassMutual Financial Group, is a global financial firm that says it manages more than $288 billion in assets.

“As an asset allocator, how I would look at is that there’s a place for passives — it’s real, they’re here. There is a real impact of the more efficient fee structures in a low return, in particular low-rate environment,” he told CNBC on the sidelines of the Milken Institute’s Asia Summit 2017 in Singapore.

Still, he said, a passive investing strategy may be harder to execute in areas like credit markets.

“Even in equity markets, where passives have their most impact, when you get those downturns, that’s where you see the indices and better active managers differentiate themselves,” Finke added.

Regarding the ongoing market rally amid geopolitical risks, Finke said there is always a cause to be concerned if there’s “something going straight up.” Some sectors, however, are showing strong fundamentals and earnings, he said.

He advised investors to not just look at the big picture, but to also focus on individual companies and how an industry’s problems may manifest in the economy in the long term.

“We are seeing a transformation in the global economy unlike anything else in our lifetimes,” he said.

Source: cnbc china
CEO of 8 billion asset manager says economy is changing 'unlike anything else in our lifetimes'