While active share, which measures the extent to which a stock fund’s holdings overlap with a specified benchmark index, can be useful information for investors, a recent article in Morningstar…
Tag: active share
Zweig on Closet Indexing & Active Share
For many years, argues Jason Zweig in last month’s Wall Street Journal, “many fund managers haven’t done much managing at all.” Instead, he writes, they track market indices and “buy…
Active Share is not a Predictor of Fund Performance
At a time when fund expenses are increasingly under scrutiny, some have turned to active share (the level of correlation between an index fund and its benchmark) as a predictor…
How to Measure a Fund’s Level of “Active” Investing
Investors and a growing number of regulators are taking a closer look at funds that claim to be actively managed but, in fact, may not be justifying their hefty fees.…
Closet Indexers Will Go the Way of the Buggy and the Whip
“The decade long run of money moving out of actively managed mutual funds in favor of passive indexes and exchange-traded products speaks volumes about investors’ palate for active management these…
The Good, Bad and Ugly of High Active Share
Patrick O’Shaughnessy, portfolio manager at O’Shaughnessy Asset Management and curator of the investment blog, The Investor Field Guide, explains that active share – a measure that shows how different a…
High Active Share And Patience: A Marriage Made In Heaven
In a 2006 paper, K.J. Martijn Cremers and Antti Petajisto showed that the best-performing fund managers tend to be those whose portfolios differ the most from their benchmark — those…
How Many Stocks Is Enough?
How many stocks do need to have in a portfolio to maximize returns and still limit risk? OSAM’s Patrick O’Shaughnessy recently looked at that question, and his findings may surprise…