Active investing, where investors actively buy and sell assets in an effort to outperform the market, is a popular strategy among many investors. In 2021, there are several key trends shaping the active investing landscape. Here are the top active investing trends to watch in 2021:
1. ESG Investing: Environmental, Social, and Governance (ESG) investing has been gaining traction in recent years, and this trend is expected to continue in 2021. Investors are increasingly looking for ways to align their investments with their values, and ESG investing allows them to do just that by considering a company’s impact on the environment, society, and corporate governance in their investment decisions.
2. Technology and Innovation: The rapid pace of technological innovation is reshaping the world of investing. From artificial intelligence and machine learning to blockchain technology and cloud computing, investors are increasingly using technology to gain insights and make more informed investment decisions. In 2021, we can expect to see a continued focus on technology and innovation in the active investing space.
3. Growth vs. Value Investing: The debate between growth and value investing has been ongoing for decades, and in 2021, this trend is expected to continue. Growth investors focus on companies with strong potential for future growth, while value investors look for undervalued companies that are trading below their intrinsic value. As the market continues to be volatile in 2021, investors will need to carefully consider their investment strategy and whether growth or value investing is the better approach.
4. Active vs. Passive Investing: The debate between active and passive investing has been intensifying in recent years, with many investors opting for low-cost passive index funds over actively managed funds. In 2021, the trend towards passive investing is expected to continue, but active investors will need to find ways to differentiate themselves and outperform the market.
5. Alternative Investments: Alternative investments, such as real estate, private equity, and hedge funds, are becoming increasingly popular among active investors looking to diversify their portfolios and generate higher returns. In 2021, we can expect to see continued interest in alternative investments as investors seek ways to hedge against market volatility and economic uncertainty.
Overall, 2021 is shaping up to be an exciting year for active investors as they navigate a rapidly changing investment landscape. By staying informed and keeping a close eye on these key trends, investors can position themselves for success in the year ahead.
