An investment strategy is an approach to investing that fund managers take when selecting investments for their funds.
What is an investment strategy?
Fund managers can choose from a variety of investment strategies, but there are two common ones: active and passive investing. Active investing is when the fund manager individually selects securities based on certain criteria to outperform their respective benchmark or market index. Passive investing involves replicating the security selection of a market index, which also replicates the market index's returns. Fund managers may also prefer other investment strategies like factor-based investing, strategic beta, or goals-based investing.