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Active Funds Are Blowing It By Riding Interest Rates All Wrong

FYI: Stock pickers love to pin their woes on the rise of algorithmic strategies and exchange-traded funds. But a team of quants argues they’ve just been caught flat-footed by slumping interest rates -- and there’s a fix.

Holding low-dividend stocks during an era of rock-bottom borrowing costs and reducing portfolio turnover help explain why active-manager performance has “collapsed” since 2018, according to Nomura Instinet LLC analysts led by Joseph Mezrich.
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