In Support of Active Management
Many have argued that the presence of high-performing portfolio managers could be due simply to random variations in a large sample. In the December 2006 Journal of Finance, Kosowski, Timmerman, Wermers and White challenge this argument.
Using a bootstrap analysis that can account for return distributions, they find that there are more top-performing managers than would be expected from the inherent variation in fund returns. They also find that the performance of these managers persists in subsequent periods. Consequently, they conclude that such managers do have skill rather than luck on their side.
For more information, see all articles on: Active Management, Asset Allocation, FInancial Planning, Investing in Stocks, Investment Returns, Portfolio Management, Research See also:
The Intelligent Investor: The Classic Text on Value Investing
Financial Statement Analysis: A Practitioner's Guide, 3rd Edition
Managing Investment Portfolios: A Dynamic Process (CFA Institute Investment Series)
