RT Journal Article SR Electronic T1 The Death of Active Management Has Been Greatly Exaggerated JF The Journal of Portfolio Management FD Institutional Investor Journals SP jpm.2022.1.449 DO 10.3905/jpm.2022.1.449 A1 Edward N. W. Aw YR 2022 UL https://pm-research.com/content/early/2022/12/08/jpm.2022.1.449.abstract AB Over the past decade, the asset management industry witnessed a significant migration of capital from active investment strategies into passive investment strategies. Undoubtedly, the structural change is shaking the active management–dominated mutual fund industry to its core. A closer scrutiny of active management suggests that the performance of active managers is mainly a function of both stock selection and portfolio construction. As other studies have already provided evidence of successful stock selection strategies via factor premiums, the author focuses on examining the impact of portfolio construction on portfolio performance. The author finds that active managers’ failure to incorporate risk during portfolio construction overwhelms the expected return signal from stock selection.