In the News


Investing Blog Roundup: Picking Funds with High “Active Share”

Document Type


Publication Date



Over the last few years, one strategy that has been proposed for finding actively managed funds that are likely to outperform index funds has been to find funds with a high “active share” — that is, funds that have holdings very different from the index to which their performance is compared. A recent bit of research from Vanguard suggests exactly what you might expect: Yes, picking funds with a high active share results in a greater chance of finding one that outperforms, but it also increases the likelihood of selecting funds that significantly underperform.