By continuing on this site you have agreed to cookies being placed and accessed by this website. More information and adjusting cookie settings.

Robeco uses cookies to analyze your visit to this site, to share information via social media and to personalize the site and advertisements in line with your own preferences. By clicking on agree or by continuing on this site, you agree to the above. More information and adjusting cookie settings.

AGREE

Robeco uses cookies to analyze your visit to this site, to share information via social media and to personalize the site and advertisements in line with your own preferences. By clicking on agree or by continuing on this site, you agree to the above. More information and adjusting cookie settings.

AGREE

By continuing on this site you have agreed to cookies being placed and accessed by this website. More information and adjusting cookie settings.

Passive investing

Passive investing is following a market-weighted index without deviating from it to achieve extra returns (alpha). Investors thus obtain the index returns adjusted for costs.

In the case of active investing, trackers – also referred to as ETFs – are often selected. Investors use a tracker to follow a stock or bond index.

A passive approach has advantages and disadvantages. Passive investors enjoy low management costs and low trading activity, but this is accompanied by a major disadvantage. Using the passive approach, investments are also made in those segments of the market that are characterized by an unattractive risk-return ratio. Take high-volatility equities, for instance. In an active approach, investors can avoid these segments and focus on the attractive parts of the market.
Share this page:

Subscription Robeco newsletter