We are pleased to release the 2019 Active Management Environment, which can be accessed with the link below. Our work on active management addresses some shortfalls of the traditional analysis, which uses the median product to describe the active management universe as a whole. These improvements and insights have allowed us to better understand product behavior and may allow for more informed selection in the future. For first time readers, an introduction to this research and methodological details can be accessed by clicking here.
- Even without skilled selection there are many cases where active management may help investors achieve better portfolio outcomes in risk and return terms.
- Those better portfolio outcomes may come from additional return or lower risk. Not all investors have the same definition of better outcomes, and the risk/return trade‐offs vary by universe.
- Adding skilled selection to the process may add additional value in portfolio construction.
- Fees remain an important part of the active management conversation. Fees and survivorship bias should be taken into account when analyzing active universes.
We look forward to discussing this research with you.