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What is active management?

In active management a manager picks securities trying to beat the market: the opposite of passively tracking an index.

The active manager analyzes companies, meets management teams, overweights the names they believe will win. The service has a price: fees of 1–2.5% yearly versus 0.05–0.2% for passive funds.

The empirical evidence is merciless: in SPIVA reports, over 15-year horizons about 90% of active equity funds return less than their benchmark. The problem isn't managers' intelligence, but competition and costs compounding year after year.

Concrete example

Over the 2010–2020 decade, a simple S&P 500 ETF beat the vast majority of actively managed US equity funds — costing ten times less.

How you see it in InsiderFlow

On InsiderFlow these concepts come alive on real data: what big funds and insiders are buying, explained every day.

Frequently asked questions

Why does active management survive?

Because the hope of beating the market sells well, and in some niches (small caps, emerging markets, bonds) skilled managers add value more often.

Active or passive for a beginner?

The consensus is clear: a low-cost passive core; active, if anything, as a deliberate satellite.