Passive vs Active Fund Management: What’s the Difference? Index Funds & Mutual Funds Explained

34
3



Passive vs Active Fund Management: What’s the Difference?
Index Funds and Mutual Funds Explained.

Thinking of investing some of your savings in the financial markets? How about using managed funds?
Do you know the difference between Active & Passive Fund Managers?
This investing tutorial will explain this difference and some key ideas behind the two forms of asset allocation.
These lessons will be applicable to Mutual Funds (Active Investing) & Index Funds (Passive Investing).

So what’s included in the explanatory video?
* The Key Difference between Passive & Active Management
* Issues, Benefits & Drawbacks of Active Funds
* Issues, Benefits & Drawbacks of Passive Funds
* And a Review

If you’d prefer to read a description rather than watch a full lesson, here is the key idea:
The key difference between active & passive fund management investing (mutual fund and index fund investing)….

Active Funds; Actively try to beat a benchmark performance (such as an index) by picking individual groups of stocks that will outperform the market.

Passive Funds; Attempt to mirror the performance of an index by holding groups of stocks that reflect the underlying index as per its constituents and their relative proportion within the index.

Also…

Active funds (mutual funds) are ‘actively’ trying to beat the market.
Passive funds (index funds) are ‘passively’ trying to mirror the market.

Active funds (mutual funds) rely more on security analysis.
Passive funds (index funds) rely more on administration.

Active funds (mutual funds) have higher costs with the opportunity for higher returns.
Passive funds (index funds) have lower costs and accept market returns.

Saving now and wanting to invest soon, but don’t know where to start? Check out the tutorial and take one of your first steps into funds management with active mutual fund or passive index funds.

Happy viewing!

Cheers,
Axel

———————
This video was brought to you by accofina.

Other accofina Products & Services:

Free Spreadsheets:

1) Ratio Analysis Calculators & Formulas
http://www.accofina.com/spreadsheets/ratio-analysis-excel.html

2) Capital Budgeting
http://www.accofina.com/spreadsheets/capital-budgeting-excel.html

3) Time Value of Money Calculators & Formulas
http://www.accofina.com/spreadsheets/time-value-money-excel.html

4) 2-Year Monthly Cash Flow Forecast
http://www.accofina.com/spreadsheets/cash-flow-forecast-excel.html

5) Retirement Planner
http://www.accofina.com/spreadsheets/retirement-planner-excel.html

Free Books:

1) Accounting: Foundation Inputs & Outputs
http://accofina.com/free-books/accounting-foundations.html

2) 331 Great Quotes for Entrepreneurs
http://accofina.com/free-books/331-great-quotes-entrepreneurs.html

Books:

1) Ratio Analysis Fundamentals
http://accofina.com/books/ratio-analysis-fundamentals.html

2) Balance Sheet Basics
http://accofina.com/books/balance-sheet-basics.html

3) Income Statement Basics
http://accofina.com/books/income-statement-basics.html

4) Cash Flow Statement Basics
http://accofina.com/books/cash-flow-statement-basics.html

5) Financial Statement Basics
http://accofina.com/books/financial-statement-basics.html

6) Corporate Finance Fundamentals
http://accofina.com/books/corporate-finance-fundamentals.html

a) Amazon Author Page:
http://www.amazon.com/author/axeltracy

b) Goodreads Author Page:
https://www.goodreads.com/author/show/7450542.Axel_Tracy

iOS Apps:

1) Ratio Analysis & Management Accounting Calculators
http://accofina.com/apps/management-accounting-ratio-analysis-app.html

2) Ratio Analysis & Management Accounting Calculators ‘Lite’
http://accofina.com/apps/lite-management-accounting-ratio-analysis-app.html

3) Profitable Pricing
http://accofina.com/apps/profitable-pricing-app.html

a) Bidi Capital (accofina) Apps
http://appstore.com/bidicapitalptyltd

Online Learning:

1) Financial Statement Fundamentals
http://accofina.com/online-education/financial-statement-fundamentals.html

a) Udemy Instructor Page
https://www.udemy.com/u/axeltracy/

b) YouTube Channel
http://www.youtube.com/accofina

Free Online Calculators:
http://www.accofina.com

Social Networking & Contact:

1) Facebook
http://www.facebook.com/accofinaDotCom

2) Twitter

3) LinkedIn
https://www.linkedin.com/company/bidi-capital-pty-ltd

4) Google+
http://plus.google.com/+accofina

source

3 Comments

  1. Ooh I love a guy who can pronounce 'specifically' correctly… .. makes a refreshing change!!

  2. First comment for the new video, hi all!
    Feel free to comment or otherwise say hello.
    I hope you get value from learning the difference between active & passive funds management.

    Cheers,
    Axel

Leave a Reply

Your email address will not be published. Required fields are marked *