Portfolio Management

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What is 'Portfolio Management'

Portfolio management is the art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance.

Portfolio management is all about strengths, weaknesses, opportunities and threats in the choice of debt vs. equity, domestic vs. international, growth vs. safety, and many other tradeoffs encountered in the attempt to maximize return at a given appetite for risk.

BREAKING DOWN 'Portfolio Management'

In the case of mutual and exchange-traded funds (ETFs), there are two forms of portfolio management: passive and active. Passive management simply tracks a market index, commonly referred to as indexing or index investing. Active management involves a single manager, co-managers, or a team of managers who attempt to beat the market return by actively managing a fund's portfolio through investment decisions based on research and decisions on individual holdings. Closed-end funds are generally actively managed.

RELATED TERMS
  1. Active Management

    The use of a human element, such as a single manager, co-managers ...
  2. Portfolio Manager

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  3. Passive Management

    A style of management associated with mutual and exchange-traded ...
  4. Actively Managed ETF

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  6. Money Manager

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RELATED FAQS
  1. What is the difference between passive and active portfolio management?

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  2. What is the difference between passive and active asset management? (SPY)

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  5. What's the difference between an index fund and an actively managed fund?

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