The Morningstar Dictionary: Active and passive

The differences between the two investment approaches have blurred recently.

Christian Charest 5 April, 2017 | 5:00PM

 

 

When exchange-traded funds made their debut in the early 1990s, they revolutionized the investment industry, not only by offering a different way to buy a fund, but also by introducing many people to the concept of passive investing. In its simplest form, passive investing means that a fund manager structures his or her portfolio so that it precisely replicates the performance of a market index, such as the S&P/TSX Composite or the Dow Jones, for example.

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Christian Charest

Christian Charest