Active-Share Study
Definition of 'Active-Share Study'An academic study conducted by researchers from Yale in 2006. The active-share study examined the proportion of stock holdings in a mutual fund's composition that was different from the composition found in its benchmark. The greater the difference between the asset composition of the fund and its benchmark, the greater the active share.According to the active-share study, there was a positive correlation between a fund's active-share value and the fund's performance against its benchmark. |
|
Investopedia explains 'Active-Share Study'For example, a mutual fund with an active-share percentage of 75% indicates that 75% of its assets differed from its index, while the remaining 25% mirrored the index.The study found that funds with a higher active-share value would tend to be more consistent in generating high returns against their benchmark indexes, which implies that more actively managed funds have more skilled managers. |
Related Definitions
Articles Of Interest
-
How To Pick A Good Mutual Fund
Learn how to evaluate mutual funds and find the right one for you. -
Peter Lynch On Playing The Market
Everyone can appreciate great advice from a professional. Read on to benefit from the vast experience of Peter Lynch. -
Your Mutual Fund: It's Riskier Than You Think
Fund managers often take on more risk than they should, putting business ahead of fund holders' interests. -
Active Share Measures Active Management
A 2006 study proves the effectiveness of a new way of sizing up your portfolio manager. -
How To Cut Your Mutual Fund Fees By Up To 90%
Most mutual funds don’t come close to beating the indexes they’re compared against. And yet they carry steep fees for active management. Find out how a little research and effort can cut your ... -
Beware Of The Mutual Fund Performance Trap
Want to own a mutual fund that will double its reported return in the next six months? Chances are, you already do. Every equity mutual fund on the planet is about to report a big jump in ... -
Using ETFs To Replace Your Expensive Mutual Funds
Fees associated with many mutual funds looks small. Some are barely over 1% or even lower. But over time those fees erode the overall value of your portfolio. And even in the near term, as in ... -
The Hidden Fees In 401(k)s
Learn about the conspicuously disclosed fees that lurk within your 401(k) investments. -
Choose A Fund With A Winning Manager
We break down the key components of analyzing a fund manager's performance so you can find a winner. -
Analyzing The Best Retirement Plans And Investment Options
Understanding the various retirement investments - from annuities to 401(k)s and everything in between - is crucial to reaching your retirement goals. Here, we examined many of the popular investments ...
Free Annual Reports