Active Fund Managers Should Actually Be Active: SocGen

Conventional wisdom says that active equity managers underperform against the market, especially after you take the cost of active stock selection into account, and that asset allocation with a semi-passive selection approach is the best bet. But according to research coming out of Societe Generale SA (OTCMKTS:SCGLY) (EPA:GLE)’s Global Quantitative Research team, the active managers outperform both before and after costs, and that managers should be fighting against the constraints that prevent them from picking stocks.

Fund managers can be highly successful, if they're active enough

“We believe that fund managers are not nearly active enough,” the report explains. “The range of possible returns offered by a stock portfolio is typically wider than an ‘asset allocation’...