Hello Marvin,

Thank you very much for your comment. Both C. Thomas Howard and I believe that the investment consultants of the world need to conduct more in-depth studies to identify what techniques in active management work. If it turns out that there are criteria, that when met, lead to consistent outperformance then the consulting industry could better identify active managers. Instead, the norm is to use techniques that actually place passive management at the center of the equation, and managers that deviate too far from a prescribed strategy are punished. The base assumption is that an index is the standard of performance. Unintentionally this overemphasis has, in our opinion, led to an active management industry that looks like an expensive version of passive investing. In our series, the Active Equity Renaissance we shared research done by Tom that identifies four simple criteria, that when followed, reliably identify quality active management. Especially noteworthy is that the criteria are predictive of consistent outperformance. This changes the screening problem significantly.

Again, thank you for your comments.

Yours, in service,

Jason