Brian Gaynor: Mozy revives debate over funds
The relative merits of active versus passive fund management is one of the more intense and long-running debates in the investment sector. The argument has resurfaced again after the release of the Mozy prospectus.
Monday, September 6th 2004, 8:57AM
by The Landlord
Mozy, a passive fund that will invest in the Australian S&P/ASX MidCap 50 Index, is being promoted by the New Zealand Exchange. The IPO is hoping to raise $40 million and is due to close on September 17.An active manager buys and sells shares on the basis of expected performance. The manager usually has a number of analysts that scrutinise listed companies, and decisions are based on industry trends and company profit forecasts.
If the manager believes the outlook for the energy sector is particularly good, the portfolio will have a strong representation of electricity and gas companies. If the manager believes that consumer spending growth cannot be maintained, the portfolio will be under-represented in retail stocks.
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