What is Active Management?
Active management is an investment approach where the fund manager picks stocks, sectors, or timing decisions to try to beat a benchmark index.
Detailed Explanation
Actively managed KiwiSaver scheme funds typically charge higher fees (0.80%–1.50%+) to cover research and trading. FMA reporting shows mixed results: some active managers beat their benchmark over multi-year periods after fees, many do not. Outcomes vary by category, manager, and time period.
Example
Illustrative example — An active growth fund might overweight Australian banks during a credit cycle expecting outperformance. If correct, it beats the benchmark; if wrong, it underperforms.
Frequently Asked Questions
Are active fees worth it?
Sometimes — but past outperformance does not predict future outperformance. Compare net returns, not gross.
Related Terms
Compare every fund on the FMA Disclose register. Refreshed quarterly. Independent — FundCompare is not a Financial Advice Provider; general information only.
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