Active Management
Active management uses investment selection and portfolio positioning rather than index replication, with results judged against the mandate and costs.
Portfolio implementation concepts distinguishing manager discretion, index tracking, holding behavior, costs, and benchmark exposure.
Active Management uses manager decisions to pursue a mandate. Index Investing, commonly called passive investing or passive management in this context, instead aims to track a specified benchmark. Neither label promises a particular return or determines trading frequency by itself.
Closet Indexing raises a different question: whether a portfolio marketed as active takes meaningfully different exposures from its benchmark. Holdings, costs, and mandate details help distinguish the services actually delivered.
A Buy and Hold Strategy concerns how long investments are retained, not how their securities were selected. A useful comparison separates selection method, holding behavior, benchmark fit, and total costs rather than relying on an active or passive label alone.
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Active management uses investment selection and portfolio positioning rather than index replication, with results judged against the mandate and costs.
Closet indexing is a mismatch between an advertised active strategy and benchmark-like exposure, assessed through holdings, returns, costs, and disclosures.
Index investing tracks a defined benchmark through replication, sampling, or derivatives, with costs, tracking differences, and market risk.