If tracking error and benchmark deviation are the primary concerns of active managers, they must know what bets the benchmark is making and then make different bets; those with low active share become 'closet indexers' earning index-like returns while charging active fees.

causalpending

Speaker

Robert Hagstrom

Evidence Quote

you're really just a closet indexer and you're just playing games around the edges there

Source

Warren Buffett Published His Whole Playbook | Robert Hagstrom on Why Only One Tenth of 1% Uses ItExcess Returns
Created: 8/12/2026, 6:12:15 PM

My Notes

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