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A Chief Investment Officer Demystifies Active vs. Passive Portfolio Management

Passive-vs.-Active-Management

In everyday life, being passive as opposed to active can have negative connotations. However, when it comes to investments, passive and active refer to different investment management styles. There are pros and cons to each, and different investors prefer different styles. With an active investment, a portfolio manager and management team is hands-on. The manager or team must be on top of market trends and staying on top of indexes in order to get the most out of their investment. In a passive style, there may not be a portfolio manager watching these assets. Passive management involves replicating the current index, instead of trading securities. This style of management is generally thought to be lower risk and lower cost. However, it may lack the highs of taking an active style.

We sat down with Patrick Fleming, the Chief Investment Officer for the State of Wyoming’s Treasurer's Office, to chat about passive vs. active styles of portfolio management.

 

 

Patrick Fleming, CIO, Wyoming State Treasurers Office

Patrick Fleming is the Chief Investment Officer for the State of Wyoming’s Treasurer's Office and is responsible for managing the State’s 19.5 billion dollars in non-pension assets.

Mr. Fleming spent 30 years working primarily in Tokyo, Hong Kong, London and New York specializing in domestic and global bond markets, equities and commodities.

Mr. Fleming is a former CEO of a 77 year old investment firm in New York. He also taught corporate finance, investment management and energy trading and hedging to MBA and undergraduate students at the University of Wyoming. Mr. Fleming holds a B.A. in Economics from Harvard University. [Source]


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