Three exceptional active investment funds

Actively managed funds can be worth the extra money if they are genuinely active. Matthew Partridge tips three such funds.

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 and Antti Petajisto of New York University came up with the idea of the active share', a measure of how a portfolio differs from the index.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri