• Fund management styles

    Not all funds are managed in the same way. When choosing a fund it can help to understand the different approaches used by fund managers.

    Fund managers manage in 1 of 3 different styles

    1. Active
    2. Passive
    3. Blended

    Active fund management

    Getting actively involved

    The fund manager will actively manage the fund using their expert knowledge and experience, together with research and forecasts, to select investments that they believe can potentially outperform a market or sector, or benchmark.

    Investment selection

    Active fund managers can follow a range of different approaches to investment selection.

    3 such approaches are:

    • Invest in businesses that have seen strong stock market growth
    • Opt for companies that they think have been undervalued by the stock market
    • Take a focused approach by holding a small, concentrated portfolio that may only include 20 holdings, which potentially offers greater returns but also comes with a higher level of risk.

    Charges

    Active funds are likely to have higher costs associated with them as the fund manager will carry out extensive research and will have more regular involvement buying and selling assets which could incur increased transaction costs.

    Passive fund management

    Tracking the market

    These funds are designed to track or mirror the overall performance of a particular market such as the FTSE 100 Index. Investors choosing this management style could expect performance in line with the market.

    In passive funds (also known as trackers) the fund manager will generally invest in assets where the performance is expected to reflect the market it's tracking. The fund manager plays a different role to an active manager as their role is to select and manage investments that aim to perform in line with the market that it is tracking.

    Charges

    Passive funds tend to have lower charges than actively managed funds because the fund manager has to follow predefined rules, will carry out less investment research and will buy and sell assets less frequently so will incur fewer costs.

    Blended fund management

    Combining active and passive

    A combination of active and passive management styles. For example, a fund manager may decide to invest part of a fund on a passive basis in order to provide access to some markets at a lower cost, and active management in other sectors and markets where they believe this approach could potentially add greater value.

    Charges

    Fund manager costs should reflect this combination with costs falling between funds which are passively managed and funds which are actively managed.

    Change of fund management style

    When a management style has been chosen, the fund manager is unlikely to move away from that style. If they do decide to change a fund's management style, we would contact you so you could decide whether you wanted to continue investing in that fund or switch to another fund.

    What to consider as an investor?

    When choosing your funds it's worthwhile considering what you want the fund to achieve alongside the costs you're happy to pay as well as your attitude to risk. Passive funds are generally less volatile than active funds, though this can’t be guaranteed.

    The management style of the fund can sometimes be found within the name of the fund or in the fund manager's introduction to the fund. You should use the Fund factsheet and Key Investor Information Document provided to double check this information.

    Whatever you decide, remember to review your fund selections regularly to make sure they continue to meet your investment goals. Don't forget, all investments carry a degree of risk, so the value of your investment can go down as well as up, and you could get back less than you invest.

    Explore our funds

  • *Architas is part of the AXA Group. They are made up of two companies:
    1. Architas Multi-Manager Limited, which is authorised and regulated by the Financial Conduct Authority. They are responsible for creating and managing the All-in-One funds.
    2. Architas Advisory Services Limited, which is authorised and regulated by the Financial Conduct Authority. They select the Quick Start and Favourite funds.