While as fund managers you may not want index clones, some active funds have lagged peers and incur risks from big sector positions.

U.S. equity-focused fund managers had a strong 2013, with the average fund rising 34%, and mid-cap funds climbing even higher. However, while most year-end reviews highlight what worked best, it can often be educational to look at the laggards to see what can be learned from these funds as well. In many cases, the funds toward the bottom of their respective mid-cap peer groups ended up there by their managers taking significant risk at the sector level.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.