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Active Investment Approach
Definition
This is an approach utilized by portfolio managers where the composition (holdings) of the portfolio are adjusted based on the future return expectations of the portfolio manager.
Using the term Active Investment Approach :
In some markets an active returns approach is the best way. For example, in small cap markets or international markets, it may make sense to employ an active management approach as the information available in those markets are less efficient than others.
Pay Special Attention To :
Active investment approaches are normally accompanied by higher fees. Therefore, be sure that the return you are receiving is commensurate with the fees you are paying. Otherwise, it may be better to utilize an index fund such as an S&P 500 tracking fund.
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Related terms
Active Return , Active Management
'Active Investment Approach' appears in the definitions of these other terms:
Alpha
