Actively Managed Fund: Managers of actively managed mutual funds buy and sell investments to achieve a particular goal, such as providing a certain level of return or beating a relevant benchmark. As a result, they generally trade much more frequently than managers of passively managed funds whose goal is to mirror the performance of the index the fund tracks. While actively managed funds may provide stronger returns than index funds, they often have higher management fees and provide more taxable income.

 

Related Words

Actively Managed Fund: Managers of actively managed mutual funds buy and sell investments to achieve a particular goal, such as providing a certain level of return or beating a relevant benchmark. As a result, the . . . View Full Definition

Closed-End Fund: Closed-end mutual funds are actively managed funds that raise capital only once, by issuing a fixed number of shares. Like other mutual funds, however, fund managers buy and sell individual . . . View Full Definition

Index Fund: An index fund is designed to mirror the performance of a stock or bond index, such as Standard & Poor's 500 Index (S&P 500) or the Russell 2000 Index. To achieve that goal, the fund purchase . . . View Full Definition

Tax-Efficient Funds: When a mutual fund minimizes the income earnings and capital gains it distributes to its shareholders, it may be described as a tax-efficient fund. In general, the smaller a fund's turnover, . . . View Full Definition