passive investment management

Passive investment management

Buying a well diversified portfolio to represent a broad-based market index without attempting to search out mispriced securities.

Passive Management

The practice of a money manager or a team of money managers making investment decisions on what securities to include in a fund or portfolio, and then leaving those securities largely unchanged for a significant period of time. To give a very simple example, an investment manager may buy every stock on the Dow Jones Industrial Average and hold them for a period of five or 10 years. Passive investment managers seek a well diversified set of securities. See also: Indexing, Active investing, Value investing.

passive investment management

A method of managing an investment portfolio that seeks to select properly diversified securities that will remain relatively unchanged over long periods of time. Passive investment management involves minimal trading, based on the belief that it is impossible to beat the averages on a risk-adjusted basis consistently. Compare active investment management.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Mentioned in ?

References in periodicals archive ?

In turn this could reduce profit margins and accelerate the shift seen in recent years towards passive investment management.

WATCHDOG'S SHAKE-UP TO DRIVE VALUE WILL BENEFIT INVESTORS

"You have a lot of complexity that you're trying to deal with today," Turner said, citing uncertainty about regulations, global volatility, difficulty generating alpha and investors shifting toward passive investment management.

Technology Critical to Meet Increasing Compliance Burden

The report also shows that 44 percent of surveyed asset managers plan to build passive investment management capabilities in-house.

Global stocks nab one-third of product development plans

For instance, clients often encounter differing advice on the merits of active versus passive investment management. Here's an example of a story that may help a client begin to consider the approaches:

Put some stories in your playbook: connect clients with concepts through the power of "story selling."

The choice between active and passive investment management is not an either/or proposition because the lines between active and passive are blurring.

Active vs. Passive? No Longer an Either/Or Choice for Advisors

This shift will be beneficial to firms like Charles Schwab (SCHW) along with passive investment management firms such as State Street (STT) and robo-advisors.

Who Wins, Who Loses With New DOL Rule? $3 Trillion in Play

Financial browser ?

Full browser ?

CITE

Site: Follow: Share:

Open / Close