What is active share? And why it does NOT predict outperformance.

“Active share” is the percentage of a portfolio that differs from a benchmark index. This measurement is often used to determine the degree of active management. Unfortunately, there have been a few poorly thought out research studies suggesting that active share is predictive(positively correlated) with excess return. As usually the media quickly picked those up, Read more about What is active share? And why it does NOT predict outperformance.[…]

Do active managers outperform in down markets?

The short answer is no. One of the prime active manager’s pitches against passive investing is that they outperform in bear markets. The argument is that active managers can foresee downturns and position their portfolios accordingly, adding value through better selection into more defensive securities, compared to an index fund manager who must track the Read more about Do active managers outperform in down markets?[…]