Closet Indexing and Other Reasons Active Managers Underperform
March 27, 2019 at 08:30 AM EDT
By Jacob Wolinsky, ValueWalk Contrary to popular belief most active managers don’t underperform due to a lack of stock-picking skills. The true cause of underperformance is a toxic combination of asset bloat, closet indexing and over-diversification. Collectively, these problems have been...