As we’ve mentioned many times before, countless studies show that most fund managers fail to beat the market. That’s partly because active managers charge high fees (making it harder to beat the market once fees are accounted for), and partly because so many are ‘closet trackers’ – funds that hug the index tightly, preferring to underperform the market by a little consistently, rather than take big bets and risk underperforming drastically.
However, it seems that active managers can be worth the money – as long as they’re genuinely active. Five years ago, Martijn Cremers of the University of Notre Dame [...]
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