@article {Crook38, author = {Michael W. Crook}, title = {An Equity Portfolio Framework for CombiningActive Management and Index-Based Implementation}, volume = {5}, number = {1}, pages = {38--44}, year = {2014}, doi = {10.3905/jii.2014.5.1.038}, publisher = {Institutional Investor Journals Umbrella}, abstract = {The proliferation of liquid, transparent, and inexpensive index-based implementation means that nearly all types of investors, individual and institutional, face a persistent portfolio implementation question regarding the allocation between active managers and index-based strategies.Placing active risk from active fund management in the same framework of uncertainty that asset allocators utilize for other portfolio decisions brings to the active versus passive debate a surprising and enlightening answer that does not match typical discourse on the matter. Instead of a binary, {\textquotedblleft}all or none{\textquotedblright} answer, reasonable (and even optimistic or pessimistic) expectations for active management imply a balanced implementation approach. Only extreme assumptions (e.g., very positive or negative levels of active return, very short or long time horizons) indicate a binary choice.TOPICS: Mutual funds/passive investing/indexing, portfolio construction, equity portfolio management}, issn = {2154-7238}, URL = {https://jii.pm-research.com/content/5/1/38}, eprint = {https://jii.pm-research.com/content/5/1/38.full.pdf}, journal = {The Journal of Beta Investment Strategies} }