Investment Management

Passive Investment Management

1

Passive investment management aims to deliver an appropriate level of return for a portfolio, using a simple buy-and-hold strategy. There is no manager or any changes to the portfolio.

2

Regardless of whether the stock market crashes or reaches all-time highs, a passively managed portfolio is not changed, the underlying investments are simply bought and held.

3

Portfolios that use a passive investment management system, tend to follow a stock market index or a particular section of the market. For instance, a portfolio could be made to track technology stocks only.

4

Research suggests that passive management has an advantage over active management because it doesn’t rely on the skill of an individual – who may also be investing with several biases that limited returns.

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