The ongoing uncertainty and volatility in investment markets presents a “huge opportunity” for active managers, according to Aviva Investors head of multi-asset, Sunil Krishnan.

Recent movements in equity markets amid US tariff announcements and geopolitical events have shaken up investment thinking and led to a de-concentration in US equities.

This has resulted in active management coming to the fore, following several years of passive investment providing steady gains.

Speaking to Wealth Investment News, Krishnan acknowledged how difficult it had been, even for good active managers, to make money in such a concentrated market.

“When the best-performing stocks are also the biggest stocks and also the most highly valued it is very hard for active management processes,” he continued.

“We see a big opportunity here. If we look at some of the key active building blocks that we use for our funds, we are seeing some signs that the managers who have the strongest and most disciplined processes are benefiting from this more uncertain, more rotational environment, and I would expect that to continue.”

However, Krishnan noted that a shift in focus to active management will “shine a spotlight” on the strengths and weaknesses in processes.

This spotlight will be keenly felt when looking at how well constructed portfolios are, how robust they are to changes in the risk environment, and the relationships between assets.

“All of that will come under strain, but those who are able to construct portfolios well and separate signal from noise, I think they’ll do very well here,” Krishnan concluded.

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