Active or Passive Investing?
A simple guide to how your money can be invested.
The basics
When your money is invested, it's typically managed in one of two ways:
- Active - aiming to outperform the market
- Passive - aiming to track the market
Understanding the differences can help give you a clearer picture of how your money is invested.
What's the difference?
Active investing
Active investing involves experienced fund managers making investment decisions on your behalf. They select investments they believe have the potential to outperform the wider market while seeking to manage risks as market conditions change.
Key benefits:
- Potential for higher returns
- Flexibility to adjust to market conditions and manage risk
Things to consider:
- Typically higher costs
- Performance can vary depending on decisions and market conditions
Passive investing
Passive investing aims to match the performance of a specific market index, such as the FTSE 100 or S&P 500. Rather than trying to outperform the market, it simply follows it.
Key benefits:
- Lower cost
- Broad market exposure and diversification
Things to consider:
- Cannot respond to market changes
- Fully exposed to market ups and downs
How active and passive investing can shape returns
Markets don't always behave as expected, and risks and opportunities can change quickly.
- Active investing aims to respond to these changes
- Passive investing follows the market, regardless of the wider economic backdrop
- Hybrid approaches apply consistent rules to try and improve outcomes
By combining these approaches, investors can benefit from different sources of return and investment styles.
Our approach
At Omnis, we believe active and passive strategies can work effectively together as part of a diversified investment approach.
- We believe in the value of active management and select skilled fund managers from around the world to run our funds.
- We use passive investments selectively where they can improve cost efficiency, diversification or market exposure.
- By combining active and passive approaches where appropriate, we aim to create well-diversified portfolios that balance opportunities for outperformance with broader market exposure.
Our solutions
Our range of solutions reflects this balanced approach:
- Omnis Agility range
Globally diversified portfolios that combine predominantly actively managed Omnis funds with selective passive exposure through Exchange Traded Funds. - Omnis Managed Portfolio Service (OMPS)
Globally diversified portfolios invested entirely in actively managed Omnis funds. - The Omnis Managed Funds
Invested in a combination of actively managed and hybrid funds, while using passive strategies for more targeted exposure to specific markets, sectors or asset classes. - Omnis Access Funds
A passive range of funds, built using index-tracking investments from Legal & General Asset Management, supported by our active asset allocation experience. - Omnis Multi-Asset Income
An actively managed solution designed to provide a sustainable level of income.
