An actively managed fund is an investment fund in which the fund manager makes the decision to purchase or sell stocks.
The staff of the investment manager chooses which stocks to purchase and sell, as well as in what amounts.
Passively managed funds are the opposite of actively managed funds.
The buy or sell choice in a passively managed portfolio is made by the fixed index the fund is modelled after. If the index changes, the actively controlled investment that tracks it will adjust as well.
In the case of passively managed securities, a fund manager’s discretion cannot be used to determine whether to purchase or sell.
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