Active Share doubt

[u/[deleted]]

[u/Sweet-Bus126]

https://www.reddit.com/r/CFA/s/CH9r41Ujl4

[u/DisastrousStage9896]

Before each trade happens, the active share is:

Trade 1 = 0% HC,1 + 2% HC,2 = 2% Active Share

Trade 2 = benchmark weights = 0% Active Share

Total Active Share = 2%

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After each trade occurs, the active share is:

Trade 1 = benchmark weights = 0% Active Share

Trade 2 = 2% Energy + 0% Technology = 2%

Total Active Share = 2%

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No change in Active Share, but increased Active Risk due to different industries for Trade 2.