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In the build-up of an investment decision, the existence of both active and passive investment vehicles triggers a puzzle for investors. Indeed the confrontation between active and index replication equity funds in terms of risk-adjusted performance and alpha generation has been a bone of contention since the inception of these investment structures. Accordingly, the objective of this chapter is to distinctly underscore whether an investor should be concerned in choosing between active and diverse passive investment structures.

The survivorship bias-free dataset consists of 776 equity funds which are domiciled either in America or Europe, and are likewise exposed to the equity markets of the same regions. In addition to geographical segmentation, equity funds are also categorised by structure and management type, specifically actively managed mutual funds, index mutual funds and passive exchange traded funds (‘ETFs’). This classification leads to the analysis of monthly net asset values (‘NAV’) of 12 distinct equally weighted portfolios, with a time horizon ranging from January 2004 to December 2014. Accordingly, the risk-adjusted performance of the equally weighted equity funds’ portfolios is examined by the application of mainstream single-factor and multi-factor asset pricing models namely Capital Asset Pricing Model (Fama, 1968; Fama & Macbeth, 1973; Lintner, 1965; Mossin, 1966; Sharpe, 1964; Treynor, 1961), Fama French Three-Factor (1993) and Carhart Four-Factor (1997).

Solely examination of monthly NAVs for a 10-year horizon suggests that active management is equivalent to index replication in terms of risk-adjusted returns. This prompts investors to be neutral gross of fees, yet when considering all transaction costs it is a distinct story. The relatively heftier fees charged by active management, predominantly initial fees, appear to revoke any outperformance in excess of the market portfolio, ensuing in a Fool’s Errand Hypothesis. Moreover, both active and index mutual funds’ performance may indeed be lower if financial advisors or distributors of equity funds charge additional fees over and above the fund houses’ expense ratios, putting the latter investment vehicles at a significant handicap vis-à-vis passive low-cost ETFs. This chapter urges investors to concentrate on expense ratios and other transaction costs rather than solely past returns, by accessing the cheapest available vehicle for each investment objective. Put simply, the general investor should retreat from portfolio management and instead access the market portfolio using low-cost index replication structures via an execution-only approach.

The battle among actively managed and index replication equity funds in terms of risk-adjusted performance and alpha generation has been a grey area since the inception of mutual funds. The interest in the subject constantly lightens up as fresh instruments infiltrate financial markets. Indeed the mutual fund puzzle (Gruber, 1996) together with the enhanced growth of ETFs has again rejuvenated the active versus passive debate, making it worth a detailed analysis especially for the benefit of investors who confront a dilemma in choosing between the two management styles.

Purpose – This chapter presents the results of an exploratory study carried out on activist institutional investor strategies. It aims to identify the way in which different types of institutional investors are reacting to new institutional pressures in the French context.

Design/methodology/approach – Our methodology is based on a series of semi-directive interviews, combined with additional relevant data.

Findings – The interpretation of results makes use of institutional theory, more specifically the work of Oliver (1991). Our study shows that active institutional investors may opt for different responses when confronted with new institutional pressures, and that these responses would seem to depend on antecedents underlined by Ryan and Schneider (2002), which in turn depend on the nature of their business relationships with the firm in which they invest. Whereas pressure-sensitive investors (such as banks and insurance companies) generally adopt acquiescence responses, pressure-resistant investors (such as pension funds and investment funds) pursue joint strategies of co-optation, influence or control with key actors such as local and international proxy advisors and French investor associations. Acting conjointly, certain pressure-resistant investors are often considered as institutional entrepreneurs in that they initiate changes and actively participate in the implementation of new norms in the field of shareholder activism in the French context. In parallel to this ongoing professionalization, other pressure-resistant investors such as activist hedge funds seem to lack sufficient legitimate power to be effective.

Originality/value – This chapter illustrates that the level of institutional investor activism depends largely on the relevant national legal framework. It also shows how institutional investor coalitions take advantage of new institutional pressures to enhance their legitimacy or increase the effectiveness of their action.

In this chapter, we briefly trace the history of the neo-charismatic movement and review Bass and Avolio’s full-range leadership theory (FRLT). We present the FRLT as the flame bearer of the movement, and argue that it should be used as a platform to integrate similar leadership theories. We identify conditions that may moderate the factor structure of the FRLT, and review the validity of the Multifactor Leadership Questionnaire – the instrument underlying the FRLT. Furthermore, we identify theoretical deficiencies in the FRLT and propose the addition of a broad class of behaviors labeled instrumental leadership, which, we argue, is distinct from transformational, transactional, and laissez-faire leadership. Finally, we discuss the utility of dispositional variables in predicting the emergence of leadership.

The world of ‘responsible’ ethical and social investment is more substantial than it might seem. At the end of 2007, holdings in ‘responsible’ funds amounted to 20 billion, against the 5 billion three years earlier. Although these ‘responsible’ holdings tend to be ‘best-in-class’ funds (Fig. 9.1), the significant rise in ‘sustainable funding’ in this area is clear.

Purpose – Leadership is a very large topic with a long history of scholarship. Despite this, existing theories of leadership have been mostly silent about group-level phenomena and challenges that leaders of small teams face. Our chapter begins to address this problem by specifying four functions or challenges that any theory of group leadership should address if it is to be helpful to small-group scholars looking for answers about leading teams.

Approach – In order to identify main group functions that should be managed by leaders and be developed into refined leadership theories, we review both leadership and team studies. Based on the four functions that we establish, we briefly review a selection of major leadership theories that we believe can provide the foundations for new and better group-level leadership theories.

Findings – By using two theoretical categorization (managing individual group members vs. managing group; affective/motivational vs. cognitive functions), we suggest that leaders of small groups deal with the four key leadership functions – (1) managing within-group interpersonal dynamics, (2) within-group coordination of information/resources, (3) group-level affect management, and (4) managing group boundaries for information/resources flow and group identity.

Value – This chapter provides specific group functions that groups and teams scholars can use as a foundation to develop better theory of small-group leadership.