Investors Turn to Active Management to Navigate Volatile Asian Markets

The appeal of passive investing, which flourished during the low-interest-rate environment following the 2008 financial crisis, is waning. High market volatility and the concentration of global benchmarks in a narrow group of US technology stocks have left passive portfolios increasingly exposed. Nearly 40 percent of investors in the region are now rotating into active management specifically to mitigate single-stock and sector concentration risks.

This demand for agility is particularly pronounced in South Korea, where the KOSPI index has seen unprecedented swings. William Bratton of BNP Paribas noted that the index experienced intraday moves of more than 5 percent on a quarter of all trading days in 2026. Despite this instability, some firms see opportunity; RBC Wealth Management recently identified the South Korean market as attractive, noting that its forward price-to-earnings ratio has hit a 20-year low. Meanwhile, investors are prioritizing managers who demonstrate nimbleness, with 63 percent of respondents in the Schroders survey citing the ability to capture outperformance as their primary requirement for asset managers navigating the current landscape.