Fidelity – Nine benchmark huggers
Fidelity, with nine funds in the list, raised issue with the period the data looked at, claiming there was an “industry-wide pullback in investor risk appetite” between 2009 and 2014 which allegedly saw small-cap positions cut back and active share levels consequently reduced.
“The average active share across Fidelity’s fund range is currently 74.3%, significantly above the 60% threshold, which we believe is highly active for the considerable size and array of assets we run,” a Fidelity spokesperson said. “Active share and tracking error are both useful tools in measuring how different a portfolio is from its benchmark, but in our view these shouldn’t be the only lens through which investors judge a fund,”
J.P. Morgan Asset Management echoed the message that active share was a “one dimensional” measure and said: “It shouldn’t really serve as a substitute for detailed due diligence or be considered a panacea for judging investment performance. A high active share is also no guarantee that a fund will outperform; simply being different from the index is not enough to beat it.”
