this statement is from Schweser notes: Actual returns for actively managed accounts are less than target-asset-allocation returns ƒÞ This illustrates the difficulty of improving returns by asset allocation or by attempting to select undervalued securities within asset classes ƒÞ What¡¦s the meaning?
Here you go Annexguy. I was about to answer your question but couldn’t do better than njblain’s answer. Just to add, actively managed portifolios acquire more transactional costs. That is, buying and selling trying to outbeat the benchmark (target assets allocation) takes alot of commission. mmd
Also, taxes are a killer with churn.