Passive management


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Passive management

Passive Management

The practice of a money manager or a team of money managers making investment decisions on what securities to include in a fund or portfolio, and then leaving those securities largely unchanged for a significant period of time. To give a very simple example, an investment manager may buy every stock on the Dow Jones Industrial Average and hold them for a period of five or 10 years. Passive investment managers seek a well diversified set of securities. See also: Indexing, Active investing, Value investing.
References in periodicals archive ?
6 trillion by 2025 (60% of global AuM), PwC predicts growth in passive management to reach $36.
7% in 2015 as passive management continued to make inroads.
TBLU uses a passive management approach and seeks to track the total return performance of the underlying index, which is a float-adjusted, modified market capitalisation-weighted index consisting of companies that are materially engaged in the water infrastructure or water management industries.
Passive management mostly takes in index-tracker funds which track the performance of a particular index, for example the FTSE 100 or the S&P 500.
Nine times out of 10, I'll take active management with low expense ratios over passive management.
Sean Phayre, Global Head of Quantitative Investments at Aberdeen, comments: Smart beta is increasingly viewed by sophisticated investors and their consultants as a third approach to investing that combines benefits of both active and passive management.
In our story, we touch on a number of topics currently in flux, including the new fiduciary rule, money market shifts, fee lawsuits, revenue sharing, passive management, retirement income alternatives, allocation issues and financial wellness.
We would suggest that beliefs around sustainable investment are developed alongside wider investment beliefs around diversity, risk management and active versus passive management.
Through active or passive management mandates, SWFs provide traditional asset managers with a large revenue pool.
Bass and Riggio (2006) identify two models of passive leadership: active leadership by exception and passive management by exception.
The fund seeks income and capital appreciation by investing in a broad range of income-generating asset classes and strategies, using active and passive management.
A more accurate statement would be that it falls between the end of the spectrums of active and passive management.