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KembaraXtra- Financial Terms- active management refers to a method of portfolio management in which investments are selected with the aim of earning abnormal returns above normal market performance.
Under active management, fund managers actively research, analyze, and choose securities they believe will outperform the market or a benchmark index.
This strategy often involves forecasting market trends, selecting undervalued investments, and adjusting portfolios frequently in response to economic conditions.
Many academic economists argue that active management conflicts with the efficient markets hypothesis, which suggests that market prices already reflect all available information.
As a result, some experts believe that diversification and passive index-tracking strategies are more likely to produce consistent long-term returns than active management.
Under active management, fund managers actively research, analyze, and choose securities they believe will outperform the market or a benchmark index.
This strategy often involves forecasting market trends, selecting undervalued investments, and adjusting portfolios frequently in response to economic conditions.
Many academic economists argue that active management conflicts with the efficient markets hypothesis, which suggests that market prices already reflect all available information.
As a result, some experts believe that diversification and passive index-tracking strategies are more likely to produce consistent long-term returns than active management.
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