Active Management in Mostly Efficient Markets
Posted: 23 Nov 2011
Date Written: November 22, 2011
This survey of the literature on the value of active management shows that the average active manager does not outperform but that a significant minority of active managers do add value. Further, studies suggest that investors may be able to identify superior active managers (SAMs) in advance by using public information. Investors who can identify SAMs should be able to improve their overall Sharpe ratio by including a meaningful exposure to active strategies.
Keywords: Portfolio Management, Equity Portfolio Management Strategies, Active Management, Fixed-Income Portfolio Management Strategies, Active Management, Portfolio Concepts from Capital Market Theory, Efficient Market Hypothesis, Risk Management
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