I recently met Colin. He has the longest unbroken track record in the UK Equity Income sector.

We did not talk about his Income fund; instead, we talked about his Blue Chip Equity Fund, which, notwithstanding a long track record has seen assets dwindle as investors joined the passive bandwagon – predominantly through Exchange Traded Funds (ETFs). Colin’s fund will be converted into a UK Rising Dividends Fund. The strategy makes a great deal of sense – focus on businesses with a track record of dividend growth and with the potential to maintain that growth. A set of rules whittle his universe down to a manageable list, then his experience and brain take over.

The challenge for Colin is that the passive ferry may have already picked up his potential passengers. The growth in ETF-land is now focused on “Smart Beta”, “Factors” or “Advanced Beta”. The terminology proliferates as quickly as the number of ETFs. domain name search Total assets under management (AUM) in these products exceeds half a trillion dollars.

If an active strategy can be defined by a set of rules using publicly available data, an index can be calculated and an ETF can be created to passively track that active strategy. We have recently witnessed a slew of ETFs offering exposure to “Value”, “Momentum”, “Quality”, “Size” and “Minimum Volatility”.

So, the world of passive is increasingly active, aggressively so, but is the man at the tiller awake? We know that the weight of AUM following any given strategy has an impact on potential returns. Even P&O’s finest ships have a finite capacity for passengers, cross that limit and the ferry begins to sink.

And what of Colin? Naïve dividend ETFs have been with us for some time – they were loaded up with high yielders prior to the Financial Crisis and holders quickly experienced the pain of dividend cuts – the pay-out on the iShares UK Dividend ETF is still 29% below the peak in 2008; its current largest holding is a supermarket. Colin understands that investment management is a blend of art and science and is very much alert and in control of his tiller.