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 ?
Jean-Pierre Sbraire, chief financial officer at Total, said: "The sale of Total's interest in this infrastructure reflects its active portfolio management strategy.
Active portfolio management will continue to sharpen our strategic focus and position the company in attractive high-growth businesses.
"This active portfolio management policy will continue with the sale of $5 billion in assets over the 2019-20 period, the majority coming from Exploration and Production," Pouyanne said.
Prior to Schroders, Nico was global head of active portfolio management for Blackrock's multi-asset and client solutions team.
'We will also carry on our key initiatives in the areas of customer centricity to drive growth, a more active portfolio management to strengthen our core, digital transformation and sustainability,' he added.
This goes in line with their active portfolio management strategy; recent acquisition yields have been around 8 per cent and this sale is thus creating value for shareholders," Al Mal Capital said in a note.
Lonza already announced in May this year that it had retained an investment bank to advise on all strategic options regarding its Water Care business as part of an active portfolio management approach.
However, in the context of the company's portfolio risk appetite, active portfolio management, and current and expected fleet profile, Fitch views BOC Aviation's leverage target as appropriate.
Active portfolio management remains an important element of our ongoing strategic focus on capital allocation while integration of our recent acquisitions is progressing as planned."
* Active portfolio management: Examining strategic options for the methacrylates business.
The firm is differentiated by its experienced and independent team, with 18 years of investment experience across all credit cycles and an investment philosophy built on two core principles: rigorous credit analysis and active portfolio management.
With this next step of active portfolio management, we continue to shift ABB's center of gravity, in line with our Next Level strategy, by strengthening competitiveness, mainly in the North American market, and lowering risk with an early-cycle business."