Active ShareDownside RiskImplicit IncentivesPerformance ChasingWe study the impact of the tournament-like competition in the mutual fund industry by examining the Active Share choices of funds. Funds with relatively poor pedoi:10.2139/ssrn.3074720Li, C. Wei...
The Fidelity Total Bond Fund is an actively managed fixed income strategy investing in a broad spectrum of investment-grade securities with up to 20% in below investment grade sectors such as high yield corporates, emerging-market debt, and leveraged loans. This diverse allocation may help the f...
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We examine the active share measure provided by Cremers and Petajsto (2009). A small active share indicates that the allocations of the fund and the index are close. Given that the index selects large stocks from the stock universe and allocates stocks with respect to their market ...
money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund. ...
Active Share— the absolute percentage difference between portfolio and benchmark holdings – is a common metric of fund activity. The flaws of this measure are evident from some simple examples: If a fund with S&P 500 benchmark buysSPXL(S&P 500 Bull 3x ETF), it becomes more passive and mor...
For example, a large-cap value fund might include in its portfolio large-cap companies that are in strong financial shape but have recently seen their share prices fall; these would be placed in the upper left quadrant of the style box (large and value). The opposite of this would be a...
Here’s everything you need to know about what a mutual fund is, how it works, and why they could be your most valuable tool for long-term investing.
A mutual fund may be better if you want to invest in dollar amounts rather than on a per-share basis, or if you want to set up an automatic investment plan. ETFs are better if you want to be able to trade shares throughout the day or if you're worried about taxes since mutual f...
Mutual funds that charge high fees might not be worth it — especially if they fail to perform. You also don’t control which specific holdings the fund includes, and you might not have as much detailed information about your investments because mutual funds only share their holdings quarterly....