The Validity of Active Investment Fund Management

Abstract

This paper considers basically the validity of active investment fund management especially as it concerns generating more profit for an investor. The paper recognises that in other to fully appreciate the validity of active investment fund management it should be compared with passively managed funds. Both forms of fund management have their merits and demerits. The paper therefore, goes into detail in comparing and contrasting the advantages and disadvantages of both forms of funds management. The paper concludes by noting that actively managed funds have a higher potential of yielding better returns in an inefficient market. It further recognises that it may be better to adopt passive management strategy in a highly efficient market. However, the final choice of which among these two strategies to adopt rests with the investor' expectations and what he intends to make out of his investment.