Dan Kern, president of Advisor Partners, looked at the performance of actively managed funds in various asset classes and found that there are problems with the benchmark indices upon which many passively managed funds are based. Bob Veres, who runs the service Inside Information, discusses the research and concludes: “Kern’s research suggests that selecting benchmark-beating active managers in certain asset classes is not the impossible task that some believe it to be. By attempting to narrow his search, Kern has discovered inappropriate indices (and a host of index funds tied to them), and segments of the global opportunity set where active managers are more plentiful, more persistent, and somewhat more predictable.” In some sectors and at some times, such as today in global bond markets that have become “unpredictable to the point of being chaotic,” it may be particularly useful to identify active managers with the ability to closely monitor events and make effective management decisions well before index-based funds (or the supposedly active managers that Veres describes as “closet indexers”) react.