Asset Allocation & Risk

How do passive and active investing differ?

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Active management is an approach in which the investor selects securities or assets directly in pursuit of returns higher than the market's, using fundamental analysis, quantitative analysis and the like.

Passive management follows a market index, as in index investing. Some analyses show that passive management has consistently outperformed active management over the long term, so it is a good idea to compare costs alongside your investment objectives.

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This answer is general financial information as of 2026-10-14, not investment advice. Rules and tax rates change, so please also check the latest guidance from the source institution.