It is disheartening that an artificially assigned style box so impacts how active equity managers are evaluated. It is truly bizarre that the biggest sin is style drift since size and PE capture little of what is truly important for executing an equity strategy. There are hundreds if not thousands of different ways to successfully manage an equity portfolio and two dimensions have no chance of capturing all the nuances.

As the evidence reveals, little or no style drift hurts performance, so it is a shame that the industry finds it necessary to place so much importance on avoiding it.

When gatekeepers, such as consultants, frown on style drift they are essentially saying "Only closet indexers need apply". Unfortunately their clients pay the price by investing in such underperforming funds.

So consultants keep their job but clients are the poorer for it.