active investing

A fund whose investment managers try to outperform the market indexes; as opposed to passive investing, where a fund seeks to mimic the returns of an index. Active fund managers conduct economic, sector and company research to handpick individual securities and employ strategies such as market timing. Most mutual funds and closed-end funds are actively managed. The allure of potentially higher returns is what attracts investors to actively managed funds, but actively managed funds are typically much more expensive than index funds.