What is a managed fund?

Question

What is a managed fund?

Answer 1

As an addendum:

"Over longer time periods, indices continue to surpass a majority of active (managed)  funds. Over the past three years (and five years), the S&P 500 has beaten 68.1% (71.0%) of large-cap funds, the S&P MidCap 400 has outperformed 66.9% (83.6%) of mid-cap funds, and the S&P SmallCap 600 has outpaced 81.1% (80.5%) of small-cap funds."

Answer 2

All funds are managed more or less.  Index funds are said to be unmanaged and compared to the managed funds they are relatively.  An index fund tracks the securities in an index such as the S & P 500 for example.  It is managed only to keep it in sync with the index.  A managed fund on the other hand generally has a team of managers and analysts that attempt to find securities that are going to give better than average performance.  There are all kinds of varieties of managed funds.  Small cap, large cap, value,  growth,  and on and on. But there are all kinds of index funds also.  There are two big differences between a managed fund and an index fund.  One is the expense ratio.  Some index funds have extremely low expense ratios in the order of 0.2%.  Most managed funds have expense ratios of 1% and higher.  The second is the tax implications.  Because a managed fund buys and sells securities frequently, the year end tax bill can be significant.  An  index fund does very little buying and selling so its year end tax bill will be significantly less.