What is Actively Managed Funds meaning?

Actively managed funds are investment funds that are overseen by portfolio managers who actively select and manage the investments in an attempt to outperform a specific market index or benchmark.

Example

The portfolio manager of an actively managed fund decides to sell stocks of underperforming companies and invest in higher-growth sectors to enhance returns.

How is Actively Managed Funds used in business?

In business, actively managed funds are used by investors who seek higher returns than passive funds by leveraging professional management and market research.

Pro Tip

While actively managed funds can offer higher returns, they typically come with higher fees and may not always outperform passive index funds in the long term.