15 years: Fixed income markets
An investment portfolio can be managed actively or passively. Lee briefly describes what these types of investment entail and the benefits of each method for the investor.
An investment portfolio can be managed actively or passively. Lee briefly describes what these types of investment entail and the benefits of each method for the investor.
1 min 49 secs
Passive portfolio management is managing a portfolio to mimic the performance of a particular index/benchmark. Active portfolio management is managing a portfolio against a benchmark and taking active positions in order to outperform the underlying benchmark. These two methods of portfolio management are very important when trying to understand investors decision making processes.
Key learning objectives:
Define Active and Passive Portfolio Management
Identify the costs and benefits of using Passive vs Active Portfolio Management