Abstract

If you are an active equity manager, it’s time for a deep look in the mirror. Your industry, your business, and your livelihood are in jeopardy. The reason is obvious: Investors are no longer willing to pay more for active management, only to receive passive performance or less. You know this already, but are you really thinking about how to solve it? The fact is that the worse the industry does, the worse you do. It’s that simple. This article provides a critical look at the state of active management, explains why most managers lack sufficient skill to beat their benchmarks, and offers renewed hope by introducing a new framework for improving deliberately.

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