Taking sufficient risk has become a challenge for active managers whose tracking error is bumping along the bottom of the range. Although some are content to endure depressed volatility, others are ratcheting up risk by removing the constraints on going short.

Some managers are unhappy about the conflict of running long-only money and taking short positions. Fundamental research-driven managers claim it harms their relationships with companies when they short their stock. That's a nonsensical argument because it is unlikely the stock will be held if the analyst doesn't rate it highly.