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.
References in periodicals archive ?
In turn this could reduce profit margins and accelerate the shift seen in recent years towards passive investment management.
"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.
Contract notice: A Multi-Provider Framework for the provision of Passive Investment Management Services.
Norfolk County Council, on its own behalf and on behalf of Essex Pension Fund, Hampshire, Kent, Northamptonshire and Suffolk County Council (the Founding Authorities) wish to let a multi-provider framework agreement for the provision of Passive Investment Management Services primarily in support of the Local Government Pension Scheme (LGPS).
The report also shows that 44 percent of surveyed asset managers plan to build passive investment management capabilities in-house.
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:
The choice between active and passive investment management is not an either/or proposition because the lines between active and passive are blurring.
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.

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