Passive management is an investment strategy where a fund is designed to mirror a specific market index, such as the S&P 500 in the USA, rather than attempting to outperform it.
This approach involves minimal buying and selling, aiming to achieve returns that closely match the performance of the index.
Naturally, in trying to replicate the index, you will often find that returns will be very slightly lower than that of the index itself, due to time lags involved replicating the investments.
Passive management is also often associated with lower fees and expenses compared to active management, as it requires less frequent trading, research and you do not have a team of analysts and managers making investment decisions.
The low fees are often attractive for those looking for a cost-effective and easy way to invest, whilst not looking to achieve higher returns as compared to the market.
For many, passive management can be a suitable option, though remember there is no such thing as a one-size-fits-all solution!