1, conceptual differences
Active fund refers to the fund manager's active investment management strategy to operate the fund, such as actively choosing the timing of entering and leaving the stock market. Active funds have higher requirements for fund managers' stock selection ability and higher probability of obtaining excess expected returns.
Passively managed funds generally choose specific index stocks as investment targets, without the need for fund managers to choose stocks, and the fund performance is less affected by human factors.
2. Differences in fund types
Active funds usually refer to bond funds, hybrid funds and equity funds, while passive funds usually refer to index funds.
3. Differences in fund names
In the name of passive funds, there are generally words such as index, ETF, ETF connection, etc., such as ETF connection A of China CITIC Construction Investment Corporation in South China.
It should be noted that index-enhanced funds are generally regarded as a special active fund, not a passive fund, because such funds have the nature of active management to maximize the expected excess returns, but compared with ordinary active funds, the investment style of index-enhanced funds is more stable.
4. Fund rate difference
The transaction rate of active funds is usually higher than that of passive funds. The management fee of passive funds is generally around 0.6%, and the management fee of active funds is the highest, generally above 1.2% or even as high as 1.5%.