To beat the benchmark, you must be different than it. Active Share® measures how much of a fund’s composition deviates from its comparative benchmark. . Active Share® is essential to understanding whether you’re getting active management.
High Active Share® shows:
Active Share® is a metric showing how securities in a fund are similar or different from a benchmark.
Active Share® makes sure you get what you pay for.
Some managers are “closet indexers” – they claim to be active and charge active management fees – but they actually track a benchmark.
If you pay management fees, and your fund has less than 60% Active Share®, then you could probably get similar performance at lower cost with an Index Fund.