Active vs. Passive Mutual Funds
When it comes to investing, there are two main types of mutual funds: active and passive. Active funds are managed by professional investors who try to pick individual stocks or bonds that will outperform the market. Passive funds, on the other hand, track a specific market index, such as the S&P 500. Both active and passive funds have their own advantages and disadvantages. Active funds have the potential to generate higher returns, but they also come with higher fees. Passive funds tend to have lower fees, but they may not generate as high of returns as active funds.
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