Active Return

Active Return

Return relative to a benchmark. If a portfolio's return is 5%, and the benchmark's return is 3%, then the portfolio's active return is 2%.

Active Return

The actual return on an investment relative to some benchmark. The active return can be either positive or negative; for example, if the actual return is 5% and the benchmark is 6%, the active return is -1%. More broadly, the active return may be the difference between an investment or portfolio and some index against which it is measured. If a portfolio outperforms the market, it may be said to have a positive active return. See also: Required rate of return.