Active share: A step forward?

Does the renewed focus on ‘active share' (AS) represent a step forward for fund disclosure or simply a PR victory? The jury is still out.

Several groups now publish the measurement – which calculates the extent to which a fund differs from its benchmark – but something of a backlash has already emerged. Majedie Asset Management, for example, has outlined a number of reasons why a focus solely on active share is misguided, while the managers of the Evenlode Income fund point out a truly active fund will inevitably go through periods of underperformance. A high AS score is no panacea. A recent study by Nomura went further, suggesting “closet tracker” US funds consistently outperformed those with a high active share betwee...