On the opposite side of the spectrum, numerous active management techniques allow you to shuffle assets and allocations around in an attempt to increase overall returns.

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In the current economic conditions, amid much uncertainty while the financial markets recover, indexed investments diversify the risk associated with investing in fewer specific assets and cost less to the investor than active management strategies.

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Asset managers earn a markedly higher advisory fee from active investment strategy and rightly so, since given the relatively more trading of assets, active investing incurs higher transaction costs but more importantly because active management relies on the skill of the asset manager which needs to be duly compensated with a higher advisory fee.

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While the vast majority of assets under management (AUM) are in conventional funds, the growth is on the more active side.

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