active funds and passive funds are the choices that investors often face when choosing investment tools. The following will compare active funds and passive funds from several aspects to help you better understand which one is more suitable for your investment needs.

1. investment strategy: the investment strategy of active funds relies on the subjective judgment and active choice of fund managers to obtain excess returns. The passive fund adopts the passive tracking strategy of copying the index to track a specific market index, which is highly consistent with the rising and falling trend of the index. The investment strategy of active funds is more flexible and can be adjusted according to market conditions, but it also requires fund managers to have higher professional ability to judge market trends. The investment strategy of passive funds is relatively stable, which does not require too much subjective judgment and is more suitable for long-term investors.

2. Cost level: Generally speaking, the management cost of passive funds is relatively low, because their investment strategies are relatively simple and fund managers do less active management. The management cost of active funds is usually higher, because it is necessary to pay the salary and research expenses of fund managers. In the long run, the cost level has a great influence on the investment income, so passive funds may be more suitable for investors who pursue long-term steady growth.

3. Return on investment: The return on investment of active funds depends on the fund manager's ability and market judgment. If the fund manager can accurately predict the market trend and make correct investment decisions, it is possible to obtain excess returns. However, research shows that most active funds can't outperform the market index in the long run. In contrast, the return on investment of passive funds is highly consistent with the performance of the tracked index, which has a good market breadth.

4. risk management: the investment strategy of active funds may have higher risks, because the decision of fund managers may bring uncertainty. The investment strategy of passive funds is relatively stable and the risk is low. In the long run, passive funds are more suitable for risk-averse investors than active funds.

to sum up, active funds and passive funds have their own advantages and applicable scenarios. If you pursue higher returns and believe in the ability of fund managers, and can bear higher expenses and risks, active funds may be more suitable. If you pay attention to cost control, stable returns and risk avoidance, passive funds are more suitable. The best choice also needs to be decided according to personal investment objectives, risk tolerance and time horizon. When choosing a fund, it is recommended that you conduct sufficient research to understand the investment strategy, cost structure and historical performance of the fund, and make decisions according to your own needs.