A smart mix of investments
Active investing involves using human portfolio managers to harness research and their own expertise to pick and choose investments. Generally speaking, the goal of active investing is to “beat the market,” or outperform certain standard benchmarks. For example, the S&P 500 is an index that tracks performance of large-cap U.S. stocks. If you’re an active investor, your goal may be to achieve better returns than the S&P 500.
If you’re a passive investor, however, your goal is to match the performance of certain market indexes. Because active investing is generally more expensive (you need to pay for actual humans to do the work and fees for more frequent trading), many stock-pickers fail to beat the market by enough to offset their management costs.
While passive investing has grown in popularity over the last few years, we believe that active management can help investors be more nimble, especially if the market takes a plunge. In fact, over the last 20 years, top portfolio managers have significantly outperformed their benchmarks in years when the market has been down. The key is to find the best, most talented portfolio managers.
Morgan Stanley Access Investing blends active and passive strategies. We dynamically determine the appropriate mix of active and passive investments—mutual funds and exchange-traded funds (ETFs)—for you to hold in your portfolio. We determine the mix based on market conditions.