In our recent research, Measure for Measure, we discussed the importance of a manager’s activeness and the difficulties involved in gauging it. As we have highlighted before, the chance of generating alpha generally rises with how active a manager is, and the UK closed-ended universe has become significantly more active in response to the challenge of cheap passive products. In that article we took a look at a range of measures for assessing the ‘activeness’ of a manager and their strengths and weaknesses. In this article we take a deep dive into the numbers, using tracking error, concentration, gearing and sector movements to look at how active the managers are across the major closed-ended equity sectors; the UK All Companies, UK Equity Income, Global, Global Equity Income, Japan, Europe and North American sectors. We rank the trusts based on each individual metric, but also relative to the rest of the sectors. Finally, we discuss which trusts stand out across the different metrics, and establish an overall ranking for each trust which shows how ‘active’ they are. As always, we are not recommending anything here, and this ranking should not be construed as anything other than a scale showing how ‘active’ each fund is relative to the other funds in the study, according to the metrics we have used. Neither are we suggesting that being very active is, in itself, meritorious.
