Fidelity: 60% closet tracker threshold 'too stringent'

According to recent research paper

The 60% active share "rule-of-thumb" used to define so-called closet trackers may be too stringent, research from Fidelity's systematic equity team suggests.

Since a 2009 paper from Martijn Cremers and Antti Petajisto, "active share" has come to be used to quantify active management, measuring the difference between a fund's holdings and its benchmark's constituents. Central Bank of Ireland cracks down on 182 closet tracker funds Co-authored by Fidelity's head of asset management for Asia Pacific Paras Anand, global equities head Tony Gibb, and data scientists Ran Wang and Barney Rowe, Active Share and Index Concentration explained that the "60% cut-off for 'activeness' has become something of a rule-of-thumb for fund selectors and regulat...