To track, or not to track: that is one question:
Whether 'tis nobler in the pocket to suffer
The slings and arrows of fund managers’ fortune,
Or to take arms against a sea of troubles,
And, by tracking, end them?
                                             To rest: to sleep;
Much more; and by a sleep to say we end
The heart-ache and the thousand natural shocks
That investments are heir to, 'tis a consummation ...

Yes, well you probably get the picture. There has long been a debate whether active fund management can ever hope to out-perform any chosen index and the jury is still out, although for some, index funds which follow (but do not actually track) their chosen index offer a better option.

The other side of the coin is, however, that active fund management gives the opportunity to out-perform the market – to add value. They also make diversification so much easier.

Have your say
Do you have a view on the difference between active and passive fund management? Why not comment below?

It is all, as usual, a matter of choosing the right financial advisor.