Asset managers earn a markedly higher advisory fee from active investment strategy and rightly so as active management relies on the skill of the asset manager which needs to be duly compensated with a higher advisory fee.
Asset managers earn a markedly higher advisory fee from active investment strategy and rightly so, since given the relatively more trading of assets, active investing incurs higher transaction costs but more importantly because active management relies on the skill of the asset manager which needs to be duly compensated with a higher advisory fee.
Fama admits there is evidence of skill with a handful of active fund managers, but the odds of picking the right mix of managers are as difficult as finding a needle in a haystack.