Actively Managed Funds
| ||
In most actively managed funds, the fund manager makes specific investments with the goal of outperforming a benchmark index. Managers do this by trying to identify investments that they believe will do better than the index. That’s their objective anyway. | ||
Additional Comments:
The truth is, most of them aren’t very good at this on a sustained basis; actively managed funds rarely outperform their benchmark index over long periods of time.
According to the Standard & Poor’s Index Versus Active (SPIVA) quarterly scorecards, which rates index funds against actively managed funds, only a handful of actively managed mutual funds beat S&P’s various index benchmarks. A big reason is that actively managed funds are usually considerably more expensive than index funds; the expense ratio for an actively managed funds can be a full percentage point or more than its corresponding index fund. |
Related Terms: | ||
Index Funds An index fund is a fund that follows a passive investing strategy, meaning that the fund ... Exchange-Traded Fund (ETF) A fund that tracks an index, but can be traded like a stock. Many ETFs ... Mutual Funds Mutual funds are the most common type of pooled investment. Funds "slice and dice" many types of ... |
« View the Stock Market Dictionary »
Latest Financial Advice
- Impact of News on Trader’s Psychology and Market Trends
- Overconfidence Bias in Stock Trading: A Critical Analysis
- Mastering Mindfulness Practices for Traders
- Impact of Market Volatility on Individual Psychology
- Leveraging Intuition in Stock Trading: A New Approach
- Mastering Mental Strategies for Effective Swing Trading
- Harnessing Behavioral Finance to Anticipate Market Trends
Free Investment Advice
Get free stock market tips and investing advice by subscribing to our newsletter: |
* Your information will not be shared or sold. |
Recommended Reading
Categories
- Trading Basics
- Investing 101
- Investing Essentials
- Understanding the Risks
- Beginning to Trade
- Trading Strategies
- Trading Psychology
- Retirement Investing
- Personal Finance
- Advanced Trading
- Penny Stocks
- FOREX Trading
- Commodity Futures
- Stock Tips
- Going Public
- Real Estate
- Research Tools
- Stock Spam
- Reviews
- Stock Market Dictionary