3 ms·
The two are totally orthogonal. Passive refers to fund management style, and passive management can certainly be based on inputs that require human judgement or
by ke88y 3y ago
The two are totally orthogonal. Passive refers to fund management style, and passive management can certainly be based on inputs that require human judgement or decision making.
Eg, the components of the S&P 500 are selected by committee, but obviously SPY is passively managed.
You can have a passively managed fund that is designed to to track an index of companies with a certain ESG score, or to track an index as well as possible while excluding non-ESG components, for example.