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 ?
Ryan Issakainen, CFA, Senior Vice President, ETF Strategist at First Trust said, We believe that the generic listing standards for actively-managed ETFs are an important step forward for the ETF industry.
Nuveen Diversified Commodity Fund is a US based actively-managed, exchange-traded commodity pool.
In the late 1990s, trackers were performing well, but in the wake of falling shares and increased turbulence in global stock markets, actively-managed funds seem to have taken the lead.
Most independent financial advisors now recommend that shareholders, even those under the umbrella of unit or investment trusts, should look towards building a diversified portfolio with a foot in both tracker and actively-managed funds.
This is the latest shot in the battle between actively-managed funds, where managers pick shares, and so-called trackers, which follow the stock market.
Funds that don't track an index, or actively-managed funds, average about 1 percent a year in expenses that customers pay, said Russell Kinnel, head of equity fund research at Morningstar, a mutual fund rating agency in Chicago.
Financial Services Veteran to Lead Actively-Managed ETF Effort
Nuveen Diversified Commodity Fund is a US based actively-managed, exchange-traded commodity pool, while Nuveen Long/Short Commodity Total Return Fund is an actively managed long/short commodity pool.
On Thursday September 26, Nordea listed the first actively-managed ETFs on NASDAQ OMX Stockholm and NASDAQ OMX Helsinki.
CHICAGO -- Foley & Lardner LLP announced today that it served as lead regulatory counsel to Bear Stearns Active ETF Trust in bringing the first actively-managed exchanged-traded fund (ETF) to market.
BT Financial Group has received approval for its MySuper licences, paving the way for the launch of new actively-managed funds from the Australian Prudential Regulation Authority (APRA).
Using listed securities, actively-managed mutual funds, index funds, ETFs and other securities, investors can purchase entire portfolios in a single transaction, with no minimum, investing by dollar amount or number of shares.