Winning With Liquid Alternatives: How to Achieve Your Financial Goals by Investing in ’40 Act Alternative Mutual Funds

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Active versus Passive Mutual Funds: The Debate Continues

The question of whether active or passive investment management is a superior approach to achieving one’s investment goals has been actively debated since the first comprehensive studies of mutual fund performance were published in academic journals. As noted earlier, the pioneers of employing modern portfolio theory (MPT) to assess the actual performance of portfolio managers seized on the availability of mutual fund data to construct databases that were used in their analyses.¹ Some of the earliest studies concluded that, as a group, mutual fund portfolio managers underperform broad ...