Reader challenge: Improve this white paper introduction
When your investment white papers’ readers snooze, your company will lose.
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Here’s the first paragraph of a white paper that would benefit from a makeover.
WHAT IS ACTIVE SHARE?
Active share is a new measure of active portfolio management. This idea was first introduced by Martijn Cremers and Anti Petajusto, two Yale School of Management Finance professors, in a 2006 academic study titled “how Active is Your Fund Manager? A New Measure That Predicts Performance.” In this analysis, active share is defined as the percentage of the portfolio that differs from its established passive benchmark.
What’s missing from this introduction? What changes do you suggest?I realize you’re operating at a handicap because you can’t see the rest of the piece. Please do your best.
I’ll hold my comments so I don’t squash the conversation. Go to it!
This intro is typical of industry white papers which adopt an academic tone either because they’ve been co-authored by a sponsored academic(to lend expertise and credibility) or because the corporate author believes a white paper should follow a dry, linear academic style to be taking seriously. The problem is that clients won’t read anything which can’t pitch a value in the opening. This intro should probably be the 2nd or third paragraph. A good opening should make a statement which positions the firm/author as not only expert but having something unique and valuable to communicate. Example:
Are active managers as a group becoming too passive? Is it the tyranny of the benchmark, imbedded disincentives, a culture of fear, a combination of all three? Active share, a relatively recent improvement in our ability to measure beta-influence on returns, can help investors better understand the performance they’re paying for but not getting.
Scratch the history. Give me one sentence on what Active Share is. Then tell me how it predicts performance. The question I should be asking at the end of the opening is: where do my funds fall on the Active Share scale?
I might even change the question heading.
I would suggest adding intro info that conveyed….”more and more, inv consultants and due dil decision-makers are placing more emphasis on a relatively new metric called “active share” in their manager hiring decison-making criteria”.
Then explain why: Institutional investors are no longer willing to pay high active fees for a “beta” portfolio…
my 2 cents…. good luck!
I’m enjoying your comments. Thank you, David, Ryan, and Bob!
I’ll build on some ideas and suggest a headline like:
What is active share and why should I care. The entire article should be written from the perspective of a benefit to me for every bit of the information provided.
What problem does Active share solve? Begin with a sentence or two describing the problem then turn to the Active share solution.
I couldn’t agree more with Mary Anne. Where is the human impact of active share? What are the headaches/opportunities I face as an investor and how could active share help me address those h/os?
It’s mostly been said in the good comments submitted already. I think it gets down to basic questions the author needs to ask. Who is the audience? How does this product or approach to investing benefit the audience? What can I say in the lead that compells the audience to read the rest of the paper?
I am loving these comments. You are all hitting the mark.