Portfolio construction

Does active investing work in volatile times?

May 06, 2025 - 2 min read

With actions of the US administration spelling continued volatility, are active strategies becoming essential for investors?

According to our 2025 survey¹, more than two-thirds of wealth managers say uncertain markets call for active management, and 63% think markets will favour active investments this year.

After a year in which 62% say the active investments on their platforms outperformed passive, it’s not surprising that 90% of wealth managers say they will add to (42%) or maintain (48%) their offering of active investments. These additions may be well timed as 63% of wealth managers say markets will again favour active in 2025.

Clearly, the investment environment we lived in from 2010 to 2020 was abnormal. Looking ahead, ‘back to normal’ is likely to be characterised by stickier inflation, higher rates, and market diversification, providing active portfolio managers with plenty of new opportunities to meet changing investor objectives.

Views from our experts

In this environment of uncertainty in the economy, uncertainty in geopolitics, and uncertainty of where the markets are going, one of the things we're seeing is that firms are starting to rely more on active management. And a good number say that active management is equally suited to preserving assets as it is to generating alpha.”

– Dave Goodsell, Executive Director, Natixis Center for Investor Insight, Natixis Investment Managers – US Distribution

We don't have to own 500 stocks. It's been really difficult to keep up with the 500 stocks because [the Magnificent] seven stocks have been driving the returns. But if you look at the top 20 holdings out of some of our portfolios, its more diversified than the 500 stocks. So you can actually manage your risk by owning less stocks”

– Daniel Nicholas, CFA, Client Portfolio Manager, Harris | Oakmark

Based on the portfolios we've analysed, over the past 15 years there has been an increase in the use of passive investing but now you have an increasing dispersion, you have an increasing volatility. All of this gives a very favourable ground for active equity managers.”

– Julien Dauchez, Head of Advisory, Head of Portfolio Consulting, Natixis Investment Managers

¹ Source: Natixis Wealth Industry Survey 2025. The 2025 Natixis Investment Managers Wealth Industry Survey was conducted in December 2024 and January 2025, and included 520 individuals in 20 countries throughout North America, Latin America, the United Kingdom, Continental Europe, Asia and the Middle East.

Marketing communication. This material is provided for informational purposes only and should not be construed as investment advice. Views expressed in this article as of the date indicated are subject to change and there can be no assurance that developments will transpire as may be forecasted in this article. All investing involves risk, including the risk of loss. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. Investment risk exists with equity, fixed income, and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided.

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