What does active management in asset management imply?

Active management in asset management refers to a strategy where managers make specific investment decisions with the aim of outperforming a benchmark or the broader market. This approach involves analyzing various assets, markets, and economic factors, and subsequently making calculated trades based on the analysis. The essence of active management is the frequent buying and selling of assets to capitalize on perceived market inefficiencies, thus striving for returns that surpass standard market performance metrics.

This strategy encompasses a range of investment vehicles and does not limit the manager to specific types of assets, allowing for a dynamic response to market conditions. Managers utilizing active management strategies continuously assess and adjust their portfolios, aiming to seize opportunities that may lead to higher returns.