Which type of investment management seeks to outperform the market?

Active management is aimed at outperforming the market by taking advantage of short-term price fluctuations and mispricings. Investment managers engaged in active management meticulously analyze various factors influencing asset prices, including economic indicators, market trends, and individual company performance. Through a combination of research, market timing, and selective trading, active managers strive to exceed benchmark returns.

In contrast, passive management typically involves mimicking the performance of a market index without attempting to outperform it. Conservative management focuses on minimizing risk rather than maximizing returns, often prioritizing the safety of investments. Quantitative management relies on complex mathematical models and algorithms to make investment decisions, which may or may not include an emphasis on outperforming the market. Therefore, the nature of active management distinctly emphasizes the pursuit of higher returns compared to a specific benchmark or the overall market.