Fund Investing Strategies

Actively managed funds

Actively managed funds are those in which the fund manager uses asset allocation, portfolio construction and stock selection to achieve the investment fund's performance goal. Active managers monitor the economic environment and shift their fund's underlying assets in line with developments. Using their skill, judgement and expertise they ensure that the investment fund remains within risk parameters and remains on-course to deliver its performance objective.

Index funds

Index or passive funds seek simply to track a particular market, region or sector by investing, as far as possible, in the assets that make up a particular index. In the past these were structured in the same way as active funds, but recently there has been a rise of exchange-traded funds. Most (but not all) ETFs are passive funds that hold a basket of shares or bonds reflecting the make-up of the index they are tracking.