there was this Montego fund following an active mgmt strategy. Over a 6 mth period it earned returns = 3.02% vs the benchmark rtn of 3.21%. agree /disagree and state why “i expect that as an active manager, Montego would outperform the index; therefore, the fund should be sold.”” CFA answer: Disagree bcoz Six months is too short a time frame to evaluate an active bond fund manager. Disagree is fine. but my reason was differnt that if a fund is xpected to outperfom its benchmark, it should NOT be sold rather we must hold on to it. it never fainthly clicked me to think in terms of timeframe in this Q. 
Any thoughts?
But if the fund earned 3.02% and the benchmark 3.21% then it didn’t outperform.
it didnt in the past 6 months … BUT is expected to in coming months.
Right but the guy was saying that he expected him to outperform because he was an active manager. He didnt meet his expectation therefore he now wants to sell. But six months is too short a time frame to come to that kind of conclusion about an active manager. I think you just read it wrong because it took me 2 seconds to come to the same conclusion as the CFAI answer when taking the test.
oh … just misread between “expect” and “expected” all this while … and spend last few hrs thinking through this. thank u so much … sebrock.
No worries, I think we are all starting to go a little batty at this point.