Webinar: “Active vs Passive Investing: Lessons Learned with Ser Jing” - 22 Jun 2020
Endowus is a roboadvisor based in Singapore. In March 2020, Jeremy and myself had the pleasure of meeting Samuel Rhee and Chiam Sheng Shi. They are Endowus’s Chief Investment Officer and Personal Finance Lead, respectively.
On 17 June 2020, I participated in a webinar hosted by Endowus, where Sam and I talked about active investing and passive investing. I want to thank Sam and the Endowus team (especially Sheng Shi) for their kind invitation. Sam is one of the wisest investors I’ve met, and I learnt a lot from him in our 1.5 hour conversation.
Active versus passive is one of the hottest topics in the investing world today and Sam and I covered a lot of ground during our session. Check out the video of our chat below!
Some of things we talked about include:
- My journey in active investing
- Sam’s journey in the active investing world before Endowus
- The “Three P’s of Institutional Investing”
- Advantages that institutional investors have
- Endowus’s focus on doing three things very well for their investors: Access to great investment products; providing good evidence-based investing advice; and lowering costs for investors
- The foundational building blocks of Endowus’s service. In particular, Sam dug deep into Endowus’s innovative full trailer-fee-rebates and how that benefits individual investors. Trailer fees are fees that a fund manager pays to an investment advisor or investment products distributor – and these fees come directly from the investors who purchase the funds. I admire Endowus for rebating the trailer fees it receives, because these fees are a huge hidden cost that eats into the returns investors earn; the presence of trailer fees is also a big reason why fund management fees are so high in Singapore.
- Endowus’s investment philosophy:
- Maximise returns by minimising cost
- Enduring belief in power of markets
- Time in markets vs market timing
- Asset allocation is everything
- Strive for the efficient frontier
- Diversification improves risk-return
- Optimise based on personal risk tolerance
- Know your limitations
- My investment philosophy
- Traits of a good active investor
- Etymology for the words “invest” and “投资” (Mandarin word for invest) and how this may be affecting investor-behavior in Western and Eastern societies.
- Capital-flows into active vs passive funds
- Evidence showing why active investing often fails
- My thoughts on why it’s still possible to beat the market
- The reasons why previously successful active managers end up underperforming
- My book recommendations for new investors: Thinking, Fast and Slow by Daniel Kahneman, and One Up On Wall Street by Peter Lynch.
- The importance of having low costs in the investment products we’re investing in
- How Endowus provides industry-leading low cost investment solutions for investors
- Investors’ behavioural mistakes during the COVID-19-driven market panic seen in the first half of this year
- The important distinction to be made between the terms “active” and “passive” when applied to investing. Passive investing is often understood to be the use of passively-managed index funds as the preferred investing vehicle. But is someone who often jumps in and out of these index funds a truly passive investor? Is a person who picks stocks, but who then holds these stocks patiently for years, active or passive?
- How I manage cash in an investment portfolio
- On hindsight, are there any changes to our investments we wish we had made during the market panic in the first half of 2020
- Endowus’s desire to constantly improve their offerings for investors whenever they find better investment products.
