active-share study

Definition

An academic study conducted in 2006 by Yale researchers. The study examined the proportion of mutual fund holdings in a given sector against the composition of the index that tracked the sector. The higher the difference, the greater the active-share of the fund. A correlation was found between the performance of the fund against the index and the active-share of the fund. Typically, the higher active-share funds outperformed the index.
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actively managed ETF activist investor