An academic study conducted by researchers from Yale in 2006. The active-share study examined the proportion of stock holdings in a mutual fund's composition that was different from the composition found in its benchmark. The greater the difference between the asset composition of the fund and its benchmark, the greater the active share.

According to the active-share study, there was a positive correlation between a fund's active-share value and the fund's performance against its benchmark.



For example, a mutual fund with an active-share percentage of 75% indicates that 75% of its assets differed from its index, while the remaining 25% mirrored the index.

The study found that funds with a higher active-share value would tend to be more consistent in generating high returns against their benchmark indexes, which implies that more actively managed funds have more skilled managers.