We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
The Death of Active Management Has Been Greatly Exaggerated.
- Authors
Aw, Edward N. W.
- Abstract
Over the past decade, the asset management industry witnessed a significant migration of capital from active investment strategies into passive investment strategies. Undoubtedly, the structural change is shaking the active management-dominated mutual fund industry to its core. A closer scrutiny of active management suggests that the performance of active managers is mainly a function of both stock selection and portfolio construction. As other studies have already provided evidence of successful stock selection strategies via factor premiums, the author focuses on examining the impact of portfolio construction on portfolio performance. The author finds that active managers' failure to incorporate risk during portfolio construction overwhelms the expected return signal from stock selection.
- Publication
Journal of Portfolio Management, 2023, Vol 49, Issue 3, p62
- ISSN
0095-4918
- Publication type
Academic Journal
- DOI
10.3905/jpm.2022.1.449