RT Journal Article
SR Electronic
T1 Active Managers are Skilled: <em>On Average, They Add More Than $3 Million Per Year</em>
JF The Journal of Portfolio Management
FD Institutional Investor Journals
SP 131
OP 139
DO 10.3905/jpm.2016.42.2.131
VO 42
IS 2
A1 Jonathan B. Berk
A1 Jules H. van Binsbergen
YR 2016
UL https://pm-research.com/content/42/2/131.abstract
AB Active fund managers are skilled and, on average, have used their skill to generate about $3.2 million per year. Large cross-sectional differences in skill persist for as long as 10 years. Investors recognize this skill and reward it by investing more capital in funds managed by better managers. These funds earn higher aggregate fees, and a strong positive correlation exists between current compensation and future performance.TOPICS: Manager selection, portfolio construction