Active vs. passive investing - what does it mean?

Active vs. passive investing - what does it mean?

NGS Super takes the responsibility of managing your money very seriously and we believe that an active style of investment management enhances member returns.

Active investment management means that our professional investment managers are making judgements about market movements and acting on those judgements by buying or selling parts of the investment portfolio across a range of asset classes. This provides investment managers with the opportunity to use their judgement to out-perform the market which is often referred to as “the index”.

In contrast, passive investment management relies only on market movements for returns and aims to achieve a return that replicates the average market return for a particular index, such as the ASX300. This means that a passive manager is not making the same sorts of decisions about timing or selection of investments as an active manager. A passive manager simply mirrors the weightings of the companies in a selected index.

The Fund has an actively managed investment portfolio as we believe this will better position us to deliver our investment objective  (CPI +3% over rolling five year periods for the Diversified Option)  on a reasonably consistent basis.