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Fund Spy

It's Hard to Argue for High-Active-Share Funds

Investors in highly differentiated funds have mostly endured higher risk while paying higher fees for mostly mediocre relative returns.

A key selling point of many actively managed equity mutual funds is their promise to look starkly different from their benchmarks. Asset managers labeling funds "high-conviction," "best-ideas," "focused," or "opportunistic" put a positive spin on this difference and typically tout the supposed advantages of their investment approaches.