Week InReview: September 28, 2018

Is active management good? It depends.

"Taken as a whole, our review of the current academic literature suggests that the conventional wisdom is too negative on the value of active management. The literature that followed Carhart (1997) has documented that active managers have a variety of skills and tend to make value-added decisions, such that, after accounting for all costs, many actively managed funds appear to generate positive value for investors. While the debate between active and passive is not settled and many research challenges remain, we conclude that the current academic literature finds active management more promising for investors than the conventional wisdom claims."

From Challenging the Conventional Wisdom on Active Management: A Review of the Past 20 Years of Academic Literature on Actively Managed Mutual Funds by Martijn Cremers, Jon Fulkerson and Timothy Riley

Read entire Week InReview: September 28, 2018