MFEA is continuing their active-passive initiative that focuses on education and providing information to investors. Its goal is to increase informed investing, and most recently they are working to increase dialogue and awareness on broad diversification to investors.
Investors may not realize that the "potential for overlap through several different funds is not true diversification," Kimber Lintz
, director of MFEA, tells MFWire
Member firms have gathered commentary to provide different ways to educate investors about the potential for overweighting certain stocks in ETF indexes that may reduce diversification.
"MFEA’s education initiative is to help create and enforce greater awareness in helping support investors to take a holistic, well rounded perspective of pros and cons of passive investing, for example," David Master
, co-head of global marketing at Janus Henderson
. Regarding passively managed funds, Master says that "Complementing that exposure with active strategy can mitigate potential downsides of unintended over-weighting."
This initiative can help investors come to "thoughtful judgements" on how they allocate their funds and "increase awareness in managing risk when outcomes are uncertain," says Master.
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