Friday, January 7, 2011

Active Share

Active Share is a concept devised by Cremers & Petajisto (2006) whereby the portfolio of a fund is analyzed to determine the proportion of stock holdings that are different to that of the benchmark portfolio. The greater the difference between the portfolio composition and the benchmark, the greater then active share. The authors of the study found a positive correlation between a fund's Active Share and the fund's performance against the benchmark.

Synonyms: Active Share Study, Active-Share

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