Portfolio management strategy where the manager makes specific investments with the goal of outperforming a benchmark index. Ideally, the manager selects securities that expose the portfolio to more risk than its index. If the additional risk generates excess return, the active management strategy has succeeded. Managed Funds "are investment Vehicles through which pooled savings of individuals are invested.These managed funds use professional investment managers,or funds managers,who move very large volumes of investment funds around the globe."(Viney,C.,2004,Financial Institutions,Instruments And Markets,McGraw Hill Australia,NSW 2113,p 120)

Active management is the opposite of passive management, where the manager does not seek to outperform his index.

See Also

• fund management
• index fund
• passive management