Jake Moeller examines recent discussions in the closet trackers debate.  It’s a tough time to be an active fund manager. Arguably it has been since the height of the global financial crisis when their fallibility was revealed in that traumatic event. Since then scrutiny by investors, regulators and financial media has been unrelenting and it has had a material impact on how active fund managers run their business. Reforms on the disclosures of fees are well documented, examination of inducements has affected how fund managers and gatekeepers interact and, the increasing prevalence of passive instruments and “robo” distribution has exerted

As a former fund-of-funds manager, Lipper clients regularly ask me about sell triggers for mutual funds. This question is quite amorphous; there are many factors that could result in a fund no longer being “fit for purpose,” but that depends on how the fund is being used. When investors blend funds into a portfolio, they have different tolerances for a sell decision than when, for example, they hold a single fund in isolation. When managing a guided-architecture platform from which I constructed a number of portfolios, I would often sell a fund out of my portfolios but still keep it