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 ?
The structure will allow American Century to deliver its time-tested actively-managed investment strategies in these ETF vehicles without the daily holdings disclosure requirement of fully transparent ETFs.
She wanted to find a winner, so she looked only at the actively-managed mutual funds ranked in the top half of performance for one-year returns through September 2016.
Some large investors in Tesla may not be able to follow CEO Elon Musk in his plan to take the company private as most passive funds would have to drop Tesla if it were removed from stock indexes and actively-managed funds may need complicated approvals to hold a stake, Reuters reports, citing experts and investors.
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.
Similar changes are expected for BIST100 (currently #18) and BIST30 (currently #16).Our View: We estimate USD 50mn of inflows at passive MSCI Turkey index-trackers and up to USD 350mn by actively-managed MSCI-benchmarked mutual funds.
Actively-managed funds look to beat the market and can sometimes achieve that.
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.
FINANCIAL services company Goldfish have introduced a new "Balanced ISA", combining a 50/50 split investment between a FTSE 100 UK tracker fund and an actively-managed international growth fund.
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.
GAMCO Investors Inc (NYSE:GBL) revealed on Monday that it has signed a license agreement with Precidian Investments LLC to support the launch of a family of ActiveShares actively-managed, semi-transparent exchange-traded funds (ETFs).
Vanguard offers a series of actively-managed money market and investment-grade bond funds for investors, financial advisors, and institutional investors.
On Thursday September 26, Nordea listed the first actively-managed ETFs on NASDAQ OMX Stockholm and NASDAQ OMX Helsinki.