One of the most frequent topics for debate in the investment community is the relative merits of active and passive investment management.

An active management approach relies upon an investment manager making specific selections of shares and/or bonds which are regularly reviewed and adjusted according to the manager’s interpretation of market conditions. The manager’s aim is to outperform the market.

A passive management approach involves creating and maintaining a portfolio which matches a specific index, such as the FTSE 100. The management may be undertaken entirely by computer with no human involvement. There is no attempt to outperform the market - the aim is to keep pace with it.Last Updated