Active investment is associated with funds that are run by fund manager or analyst teams that actively search for optimum investments. The active investment team will decide on which assets to buy and sell on the behalf of an investor.
Active investment aims to producer superior returns to a market as a whole through selecting the best set of assets in a specific sector or sectors.
Compared to passive investment, active investment has a number of advantages; it can focus on areas where passive investment is not suitable (e.g. property funds and smaller companies), can produce superior returns by selecting the best assets and can protect investors better than passive investments due to active investment strategy.