Passive investment strategy

Passive investment strategy

See: Passive investment management.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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Group finance director John Armstrong said: "Having delivered more than PS100m inward investment and developed homes for in excess of 1,000 people in Newcastle in recent years, it is with a sense of regret but perhaps also inevitability that we are having to adopt a more passive investment strategy and look at developments outside the region to realise our growth ambitions."
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According to the survey, 84 percent of the respondents still use a passive investment strategy, characterized by buying securities and holding them until maturity or investing in benchmark products designed to yield the market rate of return.
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A passive investment strategy involves investing the portfolio in a way that results in the returns of each asset category matching that of an index (e.g., investing the U.S.
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