Active Fund

Active funds are investment strategies that are directly managed by a manager or team of managers. They individually select securities to beat their intended market index or benchmark.

Active funds are based on the idea of active investing, or actively working to outpace the market’s returns by individually selecting securities like stocks and bonds. Because of the amount of research and time requied to develop an investment strategy, active funds can be more expensive than passive funds. However, given the potential to beat the market, investor returns may outpace the fees and make the investment worthwhile.