Active and passive investment strategies differ in how investments are selected and managed to achieve returns.

Active investment strategies

Active investing involves actively selecting and managing investments with the goal of outperforming a benchmark or market index.

Key characteristics:

• Fund managers make individual asset selection decisions
• Investment choices are based on research, forecasts, and market views
• Portfolios may change frequently
• Typically, higher management costs
• Returns depend on the manager’s skill and decisions

Examples:

Actively managed equity funds , active property or infrastructure funds 

Passive investment strategies

Passive investing aims to replicate the performance of a market index, rather than outperform it.

Key characteristics:

• Investments track a specific index (e.g. share market or property index)
• Limited buying and selling of assets
• Lower management costs
• Returns closely follow the underlying market
• Minimal manager discretion

Examples:

Index funds and Exchange Traded Funds (ETFs)