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When Should You Use an Active Fund?

Passive funds have grown in popularity as cheap, simple investment options. But does it ever pay to use an active manager? Yes. 

Jocelyn Jovene 25 January, 2021 | 9:57

Active funds

When allocating funds in a portfolio, one of the questions investors face is whether to use active or passive funds. Let's review the purpose of active fund management, how useful it is and what key criteria investors should use to make better decisions.

Active Funds. What's the Point?

Simply put, active managers try to beat their benchmark. They will try to pick the best countries, sectors or stocks, and gather them up in a portfolio with the expectation that their return after fees will be above their benchmark index.

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About Author

Jocelyn Jovene  is Editor for Morningstar France

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