Raj Sharma, managing director of the Sharma Group at Merrill Lynch Private Wealth Management, recently said that he thinks “this is the golden age of active management.”
In an interview with Barron’s as part of its special report on America’s Top 1,200 Financial Advisors, the Boston-based financial advisor explained that at a time of high inflation and rising interest rates, we’re now in “an environment where you have winners and losers.”
“Inflation cuts both ways. It cuts your purchasing power, but for certain industries it can be positive because it improves companies’ ability to raise prices and improve their profit margin,” said Sharma. “So, we think you need a balanced approach: It’s not all growth or all value. I also think this is the golden age of active management. Passive management worked when you had a rising tide lifting all boats. Now, you have an environment where you have winners and losers.”
Sharma, who began working as an advisor months before the 1987 stock market crash, also noted that “people don’t listen to an advisor” during a bull market, adding that “in a bear market, the value of advice is more apparent and more important because it underscores the value of having a long-term plan.”
He added that outside U.S. equities, he sees investment opportunities in emerging markets. “In emerging markets you have more than 100 countries. Each one has different dynamics, demographics, growth, and economic systems,” Sharma said. “It’s important to actively manage that exposure. Over the past decade or so, international equities have underperformed the U.S. But that may not be the case over the next decade.”
Investment firm T. Rowe Price offers a suite of actively managed global ETFs, including the T. Rowe Price Dividend Growth ETF (TDVG), the T. Rowe Price Growth Stock ETF (TGRW), the T. Rowe Price Blue Chip Growth ETF (TCHP), and the T. Rowe Price Equity Income ETF (TEQI). T. Rowe Price has been in the investing business for over 80 years through conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.
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