The number of European equity funds defined as ‘closet trackers' has dropped from highs of nearly 40% during the global financial crisis but is still significant at 20% of portfolios, according to research by Morningstar.
The ratings agency found around 17.5% of total European equity assets are now run within 'closet trackers'; defined as actively-managed funds with an active share ratio of below 60%. Morningstar found funds in the highest active share quartile were found to have reported better performance than those in the least active share quartile in four out of five five-year periods. It also noted that although the average active share for European large-cap funds was 70% over the last three years, some investors are still overpaying for low active share funds. But the ratings agency added th...
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