FYI: Investors surely wish all of their active managers were better at beating the market — but the asset management industry might be better off keeping some duds around.
In a new paper for the National Bureau of Economic Research, Wharton School professor Robert Stambaugh argues that more skill across the board would result in lower excess returns. More investors would be accurately identifying and trading mispriced securities, and thus diminishing the potential for alpha.
Regards,
Ted
https://www.institutionalinvestor.com/article/b1g3rb27rx58cp/When-Investment-Skill-Is-a-Bad-Thing
