Actively managed fund

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Actively Managed Fund

A pool of liquidity with a portfolio that an investment company trades actively in order to meet the fund's investment goals. For example, an actively managed fund may have a target return or a target level of risk. If the target is not being met, the investment company managing the fund makes appropriate trades in order to correct the situation. Mutual funds are actively managed funds. See also: Index fund.

Actively managed fund.

Managers of actively managed mutual funds buy and sell investments to achieve a particular goal, such as providing a certain level of return or beating a relevant benchmark.

As a result, they generally trade much more frequently than managers of passively managed funds whose goal is to mirror the performance of the index a fund tracks.

While actively managed funds may provide stronger returns than index funds in some years, they typically have higher management and investment fees.

References in periodicals archive ?
Exhaustive studies have shown that over the long term, the average actively-managed fund has underperformed its appropriate passive benchmark by about 1.8% per annum on a pre-tax basis (taking taxes into account would increase this figure to approximately 3%).
PSE president Ramon Monzon said the three-basis-point licensing fee was reasonable given that fund managers charge 200 to 300 basis points of AUM for actively-managed funds.
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.
Upon completion of the transaction, BNP Paribas Securities Services will become the fund administration service provider for DWSs actively-managed funds in Germany and Luxembourg.
In India, actively-managed funds have consistently beaten benchmarks over the years and are likely to continue to do so in the coming years.
"There's no clear reason to [select them] over actively-managed funds."
But she argues that actively-managed funds offer specific investing strategies that can be very appropriate in volatile markets like the one we're experiencing now.
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.
Trackers will produce consistent performance, while with actively-managed funds it is hard to find a winner.
EIP group's actively-managed funds, index funds and non-listed beta solutions were not included in the deal, and will continue to be operated by the alpha management team under a new firm called EIP Alpha Limited.
Moreover, ETFs are passively managed, which is good for retail investors, especially those investing for the first time, as costs are lower compared to actively-managed funds.