Beacon Pointe Addresses the Active vs. Passive Investing Debate at the 35th Annual NAFOA Conference

Beacon Pointe participated in the Native American Finance Officers Association’s (NAFOA) 35th annual conference hosted by the Muscogee (Creek) Nation at the River Spirit Casino Resort Hotel in Tulsa, Oklahoma October 2-3, 2017.  NAFOA serves member tribes through advocacy, events, leadership development, and education initiatives. NAFOA represents the largest group of tribal council members, policy makers, and financial professionals with common goals and purpose. One of the key elements of NAFOA conferences is the open exchange of critical finance and investment related issues facing Tribal Governments and their financial leaders. This was the tenth NAFOA conference Beacon Pointe has supported.  Beacon Pointe’s Founder, Garth Flint, and Associate Investment Consultant, Michael Di Rocco, enjoyed meeting with several tribal leaders during the two-day event.

For the conference, Beacon Pointe authored a paper titled “A Rare and Dying Breed” which can be found in the “Navigator,” published by NAFOA. The paper addressed the timely topic of active versus passive investment strategies. Beacon Pointe’s position is that the current flows into passive (index and ETF) strategies is a cyclical event, not a secular one. Historical investment returns demonstrate that there are periods when passive strategies outperform active strategy and vice versa. Even with the large flows into index and ETF funds, Beacon Pointe contends that there are active managers who have and can outperform passive strategies over complete market cycles (peak to peak or trough to trough). One of the many tools used by Beacon Pointe in its research process pertaining to active investment managers is “active share.” Academic studies have shown that active share analysis assists in identifying those managers that have the potential to outperform their respective passive benchmarks over time.

For a full copy of the paper on how Beacon Pointe utilizes active share, click here.

We look forward to participating at the next NAFOA Conference to be held April 23-24, 2018 in New Orleans!