As retail investors, we often perceive ourselves or by others as inferior investors that are incapable of obtaining superior returns as compared to institutional investors. This is partly due to the pre-conception that institutional investors are more sophisticated and knowledgeable where they can utilise complicated strategies with confusing instruments. However, with more and more articles that emphasized the ineffectiveness of active institutional funds and how passive funds are outperforming active funds, you may be swayed towards believing that active funds are lacking.

So how do we, retail investors who want to take on a more active investment approach, do to outperform the market benchmarks? 

Given their long establishment and experiences, active institutional funds do have established processes and frameworks that retail investors can exploit to improve their chances. 

1. Efficient employment of capital

Institutional investors often have large amount of capital. To maximise returns, it is also prudent …