# Active Share Study.

An active share study is a research project that investigates the percentage of a mutual fund's holdings that differ from the holdings of its benchmark index. The study is important because it can help investors understand how much of a fund's performance is due to the fund manager's stock picking ability, and how much is due to the fund's underlying index.

The study is usually conducted by looking at a fund's holdings at the end of each year, and comparing them to the holdings of the index at the end of the year. The percentage of the fund's holdings that differ from the index is known as the active share.

There are a few different ways to calculate active share, but the most common is to simply take the sum of the absolute value of the differences between the fund's holdings and the index's holdings, divided by two.

For example, if a fund has a portfolio that is made up of the following stocks:

Company A: 5%
Company B: 10%
Company C: 15%
Company D: 20%

And the index that the fund is tracking has the following holdings:

Company A: 10%
Company B: 15%
Company C: 20%
Company D: 25%

Then the active share would be calculated as follows:

(5% - 10%) + (10% - 15%) + (15% - 20%) + (20% - 25%) = -10%

The active share would be 10%, because 10% of the fund's holdings differ from the index.

Active share studies are important because they can help investors understand how much of a fund's performance is due to the fund manager's stock picking ability, and how much is due to the fund's underlying index. If a fund has a high active share, it means that the fund manager is making a lot of bets that are different from the index, and so the fund's performance What are fund categories? Fund categories are used to group together funds with similar characteristics. For example, all equity funds would fall into the same category, as would all bond funds. This makes it easier for investors to compare funds and choose the one that is right for them. What is the full form of NAV? The full form of NAV is "Net Asset Value." NAV is the value of a mutual fund's assets minus its liabilities, divided by the number of shares outstanding. The NAV is calculated daily, and is the price at which shares of the fund are bought and sold. What is active risk? Active risk refers to the risk that is incurred as a result of an investor making active decisions about investments, as opposed to passively investing in a index fund, for example. Active risk is also sometimes referred to as "unsystematic risk." Does Active Share include cash? Active share is a metric that measures the percentage of a portfolio that is invested in securities that differ from the securities in the benchmark index.

The answer to the question is "No", active share does not include cash. How do you calculate active risk? The active risk of a mutual fund is the risk that the fund's performance will deviate from the performance of the benchmark index. The active risk is measured by the standard deviation of the fund's excess return over the benchmark index.