Okay, thanks for all your replies. Given that there is no exact definition, I will settle on a basic definition like this one based on your replies:
Passive management is an investment strategy that tracks a market index or portfolio, most commonly a market weighted one. In a market-weighted index or portfolio, the proportion of each stock in the index or portfolio is based on the stock's market capitalization relative to the total market capitalization of all stocks in the index or portfolio. In both the market capitalization of a stock relative to the total market capitalization of all stocks determines that stock’s percentage influence on the overall performance of that index or portfolio.
The goal is not to outperform but to match the performance of that index or portfolio, minimize investing fees and to avoid the adverse consequences of failing to correctly anticipate the future. In passive management, the AMC is still involved but the role of the fund manager is much more limited. The AMC ensures the fund tracks an index or benchmark and handles the administrative tasks (like legal matters, investor communication, and compliance)
Passive management is an investment strategy that tracks a market index or portfolio, most commonly a market weighted one. In a market-weighted index or portfolio, the proportion of each stock in the index or portfolio is based on the stock's market capitalization relative to the total market capitalization of all stocks in the index or portfolio. In both the market capitalization of a stock relative to the total market capitalization of all stocks determines that stock’s percentage influence on the overall performance of that index or portfolio.
The goal is not to outperform but to match the performance of that index or portfolio, minimize investing fees and to avoid the adverse consequences of failing to correctly anticipate the future. In passive management, the AMC is still involved but the role of the fund manager is much more limited. The AMC ensures the fund tracks an index or benchmark and handles the administrative tasks (like legal matters, investor communication, and compliance)
Statistics: Posted by InvestementBear — Thu Nov 28, 2024 5:09 am — Replies 16 — Views 720