Active Management

(redirected from Actively-Managed Portfolio)

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 ?
Encore+ aims to deliver stable and growing income alongside long-term capital appreciation, from an actively-managed portfolio, in a monthly dealt open-ended fund structure.
From a 'basket' of Shari'ah-compliant companies, a selection is made of those whose earnings are most likely to exceed the market average and the result is an actively-managed portfolio intended to outperform an Islamic equity index.
An open-ended gilt fund, DWS Gilt Fund offers investors the opportunity to invest in an actively-managed portfolio of government securities.