Active share measures the percentage of a fund’s portfolio holdings differing from its benchmark. Active share can range from 0% (index fund) to 100% (no commonality with the benchmark index).The greater that percentage, the stronger the indication that the fund employs true active management over time. A 2009 Yale School Of Management study on active management found that funds with higher active share generally outperformed against their benchmarks over time on a historical basis.
During periods of significant market disruptions or in the event that suitable investment opportunities become less available, the Fund has the flexibility to hold higher cash positions as evidenced in the past.
We look to gold to provide protection against the unintended consequences of government interventions, bank bailouts, long-term imbalances and currency crises.
Managers who are given the flexibility to go anywhere and own out-of-benchmark stocks and who make independent investment decisions, in our view, are more likely to outperform over the long term.