Do active fund managers outperform passive fund managers?
The answer depends on how you define performance, a recent study from the U.S. Federal Reserve concludes. If you define performance based on absolute returns, then yes, active funds outperform passive funds. If you define performance based on measures of risk adjusted returns, then no, active funds do not outperform passive funds.
Active managers vs passive managers: The battle of profit and returns
In their recently released study, Returns to Active Management: The Case of Hedge Funds, authors Maziar Kazemi and Ergys Islamaj document what they claim is a non-linear relationship between activeness and...