Fund investing strategies

Actively managed funds

With actively managed funds, the fund manager uses asset allocation, portfolio construction and stock selection to achieve an attractive return and/or outperform a benchmark. Active managers monitor the economic environment and adjust the assets held by the fund in line with relevant developments. Relying on their skill, judgement and expertise they strive to keep the investment within target risk parameters and on course to deliver its performance objective.

Index funds

Index or passively managed funds seek to track a particular market, region or sector by investing, as far as possible, in the securities that make up a particular index. Occasionally other investment techniques (e.g. the use of derivatives) are used to achieve investment goals. Most passively managed investment funds are now traded on exchanges and often also called "exchange traded funds", or ETFs.