The value of active portfolio management

Research output: Contribution to journalArticlepeer-review

16 Scopus citations


We calculate the value of interim portfolio revision, an integral component of active management of mutual funds by comparing the returns on actively managed mutual fund portfolios with the returns the fund portfolios would have earned had there been no interim revision. The results show that, on an average, excess returns from interim portfolio revision do not cover the incremental trading costs, even over holding periods as long as 6 months. Across mutual funds, we find evidence of a positive relationship between the excess returns and mutual fund expense ratios suggesting that those managers who generate higher excess returns charge higher fees from the stockholders.

Original languageEnglish (US)
Pages (from-to)331-346
Number of pages16
JournalJournal of Economics and Business
Issue number4
StatePublished - 2004


  • Mutual funds
  • Performance evaluation
  • Portfolio management

ASJC Scopus subject areas

  • General Business, Management and Accounting
  • Economics and Econometrics


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