InvestorQ : What are actively and passively managed funds? which one is better?
Gauravi Patel made post

What are actively and passively managed funds? which one is better?

Mary Joseph answered.
3 years ago
Let’s understand what these funds are:
Actively managed funds:
It either uses single manager, co-managers, or a team of managers to attempt to outperform the market and produce better than passively managed funds. Portfolio managers involved in active investing pay close attention to market trends, shifts in the economy, changes to the political landscape, and factors that are likely to affect specific companies.

Passively managed funds:
Under this, the fund manager tries to mimic some benchmark, replicating its holdings and even performance. The purpose of index funds or passively managed funds is to generate a return that is same as the chosen index instead of outperforming it. It does not have a management team making investment decisions and can be structured as an exchange-traded fund (ETF).
Now, which investment is better is investor discretion. Both the funds have unique features which can be ideal for different investors. 

Investors who are price-sensitive and are not capable of taking higher risks often choose Passive investing. 
While, investors who are more concerned about their returns and the funds they invest in, investors who are more competitive and not very price and risk-sensitive often goes for active investing. But the large mass opts for passively managed funds and considers them better due to the extent of cost and risk involved.