The Trouble With Active Share
It's a descriptor, not a predictor.
The following first appeared in the June issue of Morningstar FundInvestor.
Last month, I wrote about the predictive power of fund expense ratios. Using the success ratio (the percentage of funds that survived and outperformed), I showed that your chances of a successful outcome grow dramatically as you move to cheaper funds. Cheap funds are more than thrice as likely to survive and outperform as high-cost funds.