Active Management

Active management is a term used within mutual funds and other funds to distinguish that it uses an actual team whether it be a single member or whole group to conduct market research. The opposite of active management is passive management which describes funds that focus on “indexing” or tying their results to a given market benchmark.

Funds with active management rely on not only fundamental but also technical analysis to conduct market research which is then used to make both buy and sell decisions. “Buy,” “Hold,” and “Sell” are common ratings an active manager may give to an equity.

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