Wednesday 23rd January 2002
|Text too small?|
A: A Passive Fund tracks an index, such as the NZSE10, and movements in the index reflect in the value of your units. An Active Fund is one where a fund manager attempts to buy and sell different shares to (hopefully) outperform the market by selecting shares that will outperform the benchmark that the fund sets for itself.
Passive funds have lower management fees because the shares in the fund match the shares in the index in the same percentages as the index. For example, if Telecom makes up 30% of the NZSE10 then the TeNZ fund will hold 30% of its shares in Telecom. Passive Funds have lower fees than Active Funds because there is less work involved for the fund manager.
No comments yet
What is treasury stock?
Can you explain the term "split factor adjustment"?
What are imputation credits?
When is a company listed as CD (cum-dividend)?
Can I buy shares in my daughters' names?
What is an IPO?
What do bid/offer and buy/sell mean?
What does 'Div cps' stand for?
When do shares go ex-dividend?
What is a 'dividend yield'?