How much value does your fund manager add to your equity investments? Active Share is one tool that can help answer the question by accurately measuring how similar the securities in a fund are to its benchmark. Active Share calculates the percentage of a fund’s holdings that deviates from benchmark holdings and/or benchmark weights. In this video we explain how it can offer you insights into the likelihood that a fund may outperform its benchmark, why it matters to Durable Portfolio Construction® and why it’s important to keep in mind when making portfolio selections.
Active Share is one metric that advisors and investors can use to assess whether a mutual fund is an appropriate investment for them. High Active Share is not a guarantee of outperformance or positive performance.