What are Actively Managed Mutual Funds?
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Actively Managed Mutual Funds
Actively managed mutual funds are funds where the fund manager has the flexibility to choose the investment portfolio, within the broad
parameters of the investment objective of the scheme. Since this increases the role of the fund manager, the expenses for running the fund turn out to be higher. Investors expect to actively manage funds to perform better than the market.
Actively managed funds also known as Active Funds or Active Investing where the fund manager with his/her expertise manages the portfolio with an objective to beat the benchmark and create the alpha with less beta & standard deviation than its benchmark.
Fund Manager can allocate any percentage to a particular stock in his portfolio subject to the overall restrictions prescribed by Securities & Exchange Board of India (SEBI).
In India, Active Funds are preferred as compared to the western markets where Passively Managed Mutual Funds are preferred for investing.
Majority of Indian Investor have experienced more return on their investments when they invest through active mutual funds rather than investing in the broader market indices.
Hi, I’m Managing Director at Gurpreet Saluja Financial Services where I help my investors to invest in mutual funds and achieve their financial goals. I’m also a Value Investor and here I write about Personal Finance & Investing.