Model Versus Active Portfolios

Published: 1 January 2020

In our guide outlining our approach to investments we discuss the difference between active and passive portfolios. A Model Active portfolio is made up of a combination of actively managed funds which are intended to maximise returns.

They are personally managed by a Portfolio Manager who - using in-depth analytical research, market forecasting, and professional judgment and experience - make investments that aim to beat the market average, while keeping investments within a risk level you are comfortable with.

A Model Passive Portfolio is when your investment is placed in a pre-made portfolio which is chosen to match your attitude to risk. Your Portfolio Manager designs the asset allocation to match various risk profiles. They then make use of tracker funds, which are designed to track various indices (such as the FTSE100) as the constituent parts.

This type of portfolio requires less constant engagement from your Portfolio Manager and therefore allows you to engage in the world’s investment markets at a much-reduced cost. View our guide here.