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Active Management

Active Management

Last Updated: January 23, 2026

Active management is an investment strategy where managers make specific decisions to outperform benchmarks using research and market analysis.

Active management is an investment approach where fund managers actively make buy, hold, and sell decisions to outperform a specific benchmark. This strategy involves continuous research, market analysis, and judgment to seize market opportunities. Unlike passive management, which tracks a benchmark index, active management seeks to capitalize on short-term price fluctuations and market inefficiencies. Managers use various tools, including fundamental and technical analysis, to inform their decisions. While potentially offering higher returns, active management also involves higher costs and risks. Performance depends on the manager's skill, experience, and ability to anticipate market trends and changes.