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Tip to fund managers: Stop hugging the benchmark; take on more active risk

US$16 trillion mutual-fund industry is facing major crisis as investors switch to passive funds that offer better returns for far less.


IN the 1990s, when Russian markets were opening up to a brave few foreign investors, East Capital AB Founder Peter Elam Hakansson had a foolproof way of rooting out the good companies from the bad. He visited their offices in winter to check if they could afford heating. In the...