Did You Know?
Q: I heard the terms active and passive investment management. What do these terms mean? Is one better than the other?
A: MMBB uses both methods to manage the investment funds.
Active Investment Management: Using financial data, fund managers purchase investments that are expected to outperform the broad market.
These MMBB funds currently use an active investment management approach:
Passive Investment Management (also known as Index Investing or index funds): Fund managers do not actively choose investments with this approach; they follow a model to create a portfolio to closely track to a specific market index, such as the Standard and Poor’s 500 index.
These MMBB funds currently use a passive investment management approach:
Which is better? It’s not an issue of ‘better’ or ‘worse’. Rather, it is an issue of understanding that each approach has slightly different objectives, which can lead to different results.
In the end, the funds you choose should be closely tied to your own investment style, or your personal risk tolerance.
Discussing your personal investment goals and risk profile with an MMBB financial planner is a great step in evaluating your current investments.
Call us at 800.986.6222, or send an email to us today.