Active Management

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Active Management

The opposite of passive management. The passive manager simply minimizes the tracking error of their portfolio and a well known index (e.g. S&P 500 index mutual funds). The active manager will deviate from the benchmark weights by (i) varying the weights from the benchmark weights on the securities; (ii) adding securities outside the benchmark or choosing not to hold securities included in the benchmark and (iii) time-varying asset allocation where weights on certain asset classes change through time. The goal of active management is to produce a return that exceeds the passive return with minimal risk.

Active Management

The practice of a money manager or a team of money managers making investment decisions on what securities to include in a mutual fund or portfolio. Sometimes active management exists within certain parameters; for example, money managers may only buy blue-chip stocks for a certain fund and growth stocks for another. The basic premise of active management, however, states that the managers can maximize the return for investors by buying or selling securities on a fairly regular basis. See also: Passive management, Indexing.
References in periodicals archive ?
In a comprehensive approach to examining the relative performance of actively managed SRI funds, the research compared them both to conventional actively managed funds as well as to a passive index.
Established in 2012, ETFis, has just launched the industry's first actively managed ETF investing solely in master limited partnerships, the InfraCap MLP ETF.
One of the key investment debates concerns the benefits of using either an actively managed fund overseen by a specialist manager, or a passive fund that simply tracks one of the major indexes such as the FTSE.
Bank of America (NYSE: BAC) is to provide greater access to Actively Managed Investments through a new product.
As an investor you have the choice of investing in actively managed funds or funds that simply aim to mirror a particular stock market index, e.
Thus, the fund is not actively managed like funds with specific fund objectives.
All installations of the Versant VDS object database and Versant enJin that are actively managed by a system administrator are prospective customers for VMC.
Most of these are actively managed funds and their managers claim to be able to invest wisely in shares which do well and go up in value by more than the stockmarket in general.
The first has to do with performance: market indices are generally hard to beat with actively managed funds.
There was no evidence, the court said, that the taxpayer actively managed the corporation or provided any services to the distressed companies.
Actively managed funds can be big winners - and big losers - and they charge more than trackers.