If the stockmarket is efficient, and if few investors can beat the market, why are most portfolios managed actively (seeking mispriced assets) rather than passively (matching an index)? This article looks at three possible explanations, favouring an explanation in terms of cognitive psychology.

The paper outlines the duties of unit trust trustees in principal/agent terms. It then discusses the reactions of a number of trustees to the suggestion that they might be acting in breach of trust because of poor performance by the funds for which they are trustees. It concludes by offering...