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.