“You only find out who is swimming naked when the tide goes out” (Warren Buffett, 2001). In bull markets, market risk is often the most important driver of performance. However, we should pay attention to bottom-up investors in both equity and credit markets as they can add value in spotting turning points and identifying areas where investors may find themselves overexposed.
The active versus passive debate consistently generates conflicting advice. The potential for active managers to side-step a falling market is one frequently cited factor. But have regional equity funds actually outperformed their respective indices during market corrections?