Keys to Improving the Odds of Active Management Success

This Vanguard research paper examines why most active managers underperform their benchmarks and identifies key factors that can improve the odds of active management success.

It discusses the zero-sum nature of financial markets, the impact of costs on net returns, and the importance of manager skill, philosophy, and process.

The paper also highlights Vanguard’s framework for manager selection, emphasizing low costs, talented teams, and a long-term, research-driven approach as critical to outperformance.