Active Share and Mutual Fund Performance

@article{Petajisto2013ActiveSA,
  title={Active Share and Mutual Fund Performance},
  author={Antti Petajisto},
  journal={Mutual Funds},
  year={2013}
}
I sort domestic all-equity mutual funds into different categories of active management using Active Share and tracking error. I find that over my sample period until the end of 2009, the most active stock pickers have outperformed their benchmark indices even after fees and transaction costs. In contrast, closet indexers or funds focusing on factor bets have lost to their benchmarks after fees. The same long-term performance patterns held up over the 2008-2009 financial crisis, and they also… Expand
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