Active Management
Active management is a portfolio strategy in which managers select securities, weights, and timing decisions to try to outperform a benchmark.
Active management, passive management, indexing, and closet-indexing terms used in implementation decisions.
Active, Passive, and Index Implementation terms describe active, passive, index, factor, smart-beta, risk-parity, tactical, timing, and long-short portfolio implementation.
Use this branch when the implementation style changes benchmark tracking, factor exposure, manager discretion, turnover, costs, or downside behavior.
| Term | Use it for |
|---|---|
| Active Management | Active, passive, index, factor, smart-beta, risk-parity, tactical, timing, or long-short implementation terms. |
| Closet Indexing | Active, passive, index, factor, smart-beta, risk-parity, tactical, timing, or long-short implementation terms. |
| Index Investing | Active, passive, index, factor, smart-beta, risk-parity, tactical, timing, or long-short implementation terms. |
| Passive Investing | Active, passive, index, factor, smart-beta, risk-parity, tactical, timing, or long-short implementation terms. |
| Passive Management | Active, passive, index, factor, smart-beta, risk-parity, tactical, timing, or long-short implementation terms. |
Check the benchmark, holdings, factor exposure, tracking error, turnover, costs, tax impact, leverage, short exposure, rebalance rule, and whether the implementation matches the stated mandate.
This page is educational and does not recommend a specific portfolio, security, fund, tax treatment, or account choice.
Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.
Active management is a portfolio strategy in which managers select securities, weights, and timing decisions to try to outperform a benchmark.
Closet indexing describes an active fund that closely tracks a benchmark while charging active-management fees.
Index investing tracks a market index through funds or portfolios designed to match benchmark exposure with low turnover and cost.
Passive investing seeks benchmark-like returns by holding broad market exposure instead of frequently selecting individual securities.
An explanatory guide on Passive Management, an investment strategy that mirrors a market index to minimize turnover and reduce costs.