Episode 364 – Martijn Cremers: Is the Conventional Wisdom on Active Management Wrong?

This is the Rational Reminder Podcast, a weekly reality check on sensible investing and financial decision making from two Canadians. We're hosted by me, Benjamin Felix, Chief Investment Officer, and Cameron Passmore, CEO at PWL Capital. Welcome to episode 364. Today's episode is a phenomenal conversation. Kudos to you, Ben, for getting this guest today.

But you know, the eternal question of active versus passive. And the I think a lot of listeners are familiar with the term active share, but you went right to the source to dig into both of those, which I thought was fascinating. It's a nuanced discussion and you have to keep open mind about this whole thing, which I think we try to do. So you gotta give again the backstory. I love the backstories and how these things all come together to get Martin Kramer's on.

It's just one of those things where active share is has become such a fundamental concept in finance. It's a bit of a, I don't know if I'd quite call it divisive, but it's an idea that stirs up a lot of debate because it is a tool that, as Martin talks about in this episode, can be potentially used to find active funds that are more likely to outperform, which is something that's kind of antithetical to the whole concept of index investing. and believing that nobody can beat the market consistently and that you cannot identify active managers. Now, to be clear, we're not changing our minds here and saying that we think we can pick active funds now, but Martin does make good, nuanced arguments about when that could potentially make more sense if an investor wants the type of distribution of outcomes that an active fund can provide. So again, we're not switching up and saying, okay, everyone we're going to start picking active funds now, but

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