Active
Security selection or allocation changes are made with the goal of improving outcomes relative to a benchmark or objective. Results can underperform.
Strategy Library
Understand Common Portfolio Approaches
The reference site discusses discretionary, non-discretionary, advisory, active, passive, thematic, sectoral, multi-asset, quantitative, value and growth approaches. Here they are reframed as educational concepts for a U.S. audience.
Passive
Attempts to track a benchmark or rules-based index rather than continually select securities to outperform it.
Value
Focuses on valuation and the relationship between price and estimates of business fundamentals or intrinsic value.
Growth
Emphasizes companies expected to grow revenues, earnings or other business measures, often with valuation trade-offs.
Thematic / Sector
Concentrates around an industry, theme or structural trend and therefore can carry substantial concentration risk.
Multi-Asset
Combines asset classes with different intended roles, correlations, income patterns and risk characteristics.
Quantitative
Uses systematic rules, signals, factors or models; model risk and data assumptions still matter.
Large / Mid / Small Company Focus
Company size can influence volatility, liquidity, maturity and business-cycle sensitivity.
Advice vs. Discretionary Management
Advice leaves investment decisions with the client; discretionary management delegates decisions under an authorized mandate. Regulatory requirements apply.