Passive Management Definition
Learn the definition of passive management and other ETF terminology from the etf.com glossary.
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Passive Management in ETFs signifies an investment approach focused on mirroring a specific index's performance. By eschewing active stock selection, these ETFs offer investors a cost-effective and transparent strategy, minimizing the need for continuous managerial intervention. Embracing a ""buy and hold"" philosophy, passive ETFs aim to replicate the index's returns, rather than beating it, attracting investors seeking a straightforward and low-cost avenue for diversified market exposure. This approach not only aligns with a long-term investment horizon but also positions investors to benefit from broad market trends while minimizing the potential drawbacks associated with active management.
