Opportunity Does Now Equal Attainment

We’ve previously argued that most managers should prefer above-average correlation, because the incremental volatility a manager accepts to pursue an active strategy will be lower when correlations are high. 

In addition, active managers should prefer above-average dispersion, because stock selection skill is worth more when dispersion is high. Both correlation and dispersion rose in 2020. Despite these relatively auspicious conditions, most active managers still failed to outperform. Why?

You can now read the full whitepaper at the link below