Economics Risk And Return Questions
Passive portfolio management refers to an investment strategy where the portfolio is constructed to replicate a specific market index or benchmark. The goal of passive management is to achieve returns that closely match the performance of the chosen index, rather than attempting to outperform it. This approach typically involves investing in a diversified portfolio of securities that mirror the composition of the index, with minimal trading or active decision-making. Passive portfolio management is often associated with lower costs and fees compared to active management strategies.