Passive protfolios vs Acitvely managed portfolios

Passive protfolios vs Acitvely managed portfolios - Passive...

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Passive protfolios vs Acitvely managed portfolios Recently passive portfolios have grown in popularity due to there low upkeep costs and investor have recognised the the market is fairly efficent (thereby making abnormal returns difficult) Indexing and Buy and Hold are 2 passive strategies Indexing: Under an indexing strategy the portfolio manager builds a portfolio which physically replicates a specifc stock market index eg. All ords or Ishare S&P 500. Replication can be full or on a sampling basis. Managing the portfolio only require periodic rebalancing and reinvestment of dividends if desired by the investor. An indexing strategy reduces the cost or research and trading (brokerage fees) compared with actively managed portfolios. Buy & Hold: Another passive strategy buy&hold involves the portfolio manager initialy buying securities and then holding them ie not trading them for a length of time (usually till they are worth more than they were paid for). A buy&hold strategy differs from indexing in
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This note was uploaded on 01/17/2012 for the course BUSINESS BU2005 taught by Professor Smith during the Three '10 term at Bond College.

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Passive protfolios vs Acitvely managed portfolios - Passive...

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