The chapter relayed research that reports that active investment funds earn lower returns after fees that benchmarks like the S&P 500. The 2023 update from the S&P Global Spiva Scorecard reinforces the point. However, the chapter also relayed research that showed that funds with active share allocations relative to the index outperformed.
A 2019 paper reviews a wide set of papers that reinforce the view that active management with (active share) allocations that differ from the index enhanced returns and details the various strategies that enable this.
See Cremers, M., J. Fulkerson, and T. Riley. 2019. Challenging the Conventional Wisdom on Active Management: A Review of the Past 20 Years of Academic Literature on Active Mutual Funds. Financial Analysts Journal 75 (4). Also at https://ssrn.com/abstract=3247356.
Further, active share portfolios that hold stocks for more than two years outperform funds with more frequent turnover. That is adds to the evidence from the Financial Times reported in chapter 1.
See Cremers, M. and A. Pareek. 2016. Patient Outperformance: The Investment Performance of High Active Share Managers Who Trade Infrequently. Journal of Financial Economics 122, 288-306.
See a YouTube video on active share: