passive investment management

Passive investment management

Buying a well diversified portfolio to represent a broad-based market index without attempting to search out mispriced securities.

Passive Management

The practice of a money manager or a team of money managers making investment decisions on what securities to include in a fund or portfolio, and then leaving those securities largely unchanged for a significant period of time. To give a very simple example, an investment manager may buy every stock on the Dow Jones Industrial Average and hold them for a period of five or 10 years. Passive investment managers seek a well diversified set of securities. See also: Indexing, Active investing, Value investing.

passive investment management

A method of managing an investment portfolio that seeks to select properly diversified securities that will remain relatively unchanged over long periods of time. Passive investment management involves minimal trading, based on the belief that it is impossible to beat the averages on a risk-adjusted basis consistently. Compare active investment management.