The Miami Fintech Club recently hosted The Miami Offshore Experience, an event that brought together leading voices from S&P Dow Jones Indices and Vanguard. The evening offered a deep dive into the long-term performance of active versus passive strategies and the growing role of ETFs.
It began with an overview of SPIVA, presented by Joseph Nelesen, Head of Specialists in Index Investment Strategy at S&P. He explained the 22-year-old initiative that compares the performance of active fund managers to benchmark indices.
SPIVA analyzes more than 22,000 funds annually across global markets, providing publicly accessible data that helps investors understand when and if active management adds value.
Much of the conversation focused on the evolving use of ETFs. While traditionally seen as passive vehicles, ETFs are increasingly used in active strategies, particularly by financial advisors seeking portfolio exposure.
Salvatore D’Angelo, Head of Product for the Americas at Vanguard, emphasized the importance of asset allocation, responsible for roughly 90% of return variability, and discussed Vanguard’s current strategy of overweighting fixed income based on long-term projections.
The panel also addressed structural challenges such as concentration limits in U.S. indices, the risks and trade-offs associated with covered call ETFs, and misconceptions about outperforming in emerging markets. It was revealed during the presentation that 72% of active managers in emerging markets underperformed their benchmarks in 2023.
As the discussion shifted to the rise of passive investing, speakers emphasized lower costs, broader diversification, and tax efficiency as major reasons behind its appeal. Even though Vanguard is known for its passive approach, D’Angelo noted that 20% of the firm’s $10 trillion in assets is managed actively. He also briefly mentioned Vanguard’s recent partnership with Wellington and Blackstone, created to expand access to private markets, but he was unable to disclose specific details.
The event ended with a cocktail hour. Attendees enjoyed fresh sushi from Komodo Miami as conversations flowed and connections were made.
For Funds Society, Madrid