Are investors now too passive?

Investors are increasingly settling for matching a market's performance rather than trying to beat it. But they could be missing a trick, says Piper Terrett.

Ever-increasing numbers of investors are ditching high-cost actively managed funds and buying passive trackers' such as exchanged-traded funds (ETFs).

These simply aim to track an index such as the FTSE 100 or the S&P 500 as closely and cheaply as possible, rather than beating it. But by always settling for just matching the market, could they be missing a trick?

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Piper Terrett is a financial journalist and author. Piper graduated from Newnham College, Cambridge, in 1997 and worked for Germaine Greer and for Adam Faith’s Money Channel before embarking on a career in business journalism. 

She has worked for most top financial titles, including Investors Chronicle, Shares magazine, Yahoo! Finance and MSN Money. She lectures part-time at London Metropolitan University and is the author of four books.