Active Investment Management

Active management is an investment style used by portfolio managers to manage fund portfolios. Active managers rely on top-down and/or bottom-up fundamental research and/or technical analysis, personal judgement, and forecasting to make decisions on what securities to buy, hold or sell. Active investing aims to outperform an underlying index or benchmark. It allows for discretion on the part of the fund manager and as such has a higher cost associated with it than passive investing. As markets have become more sophisticated over the years it has become increasingly difficult to beat the index, especially once fees are subtracted from returns.