Passive management generally involves which of the following?

Passive management is an investment strategy that aims to replicate the performance of a specific market index rather than trying to outperform it through active trading. By mirroring the composition of a specific index, passive management minimizes trading costs and focuses on long-term growth, presuming that market efficiency will yield a return that aligns with the overall market performance. This approach is grounded in the belief that markets are generally efficient and that it is difficult to consistently beat the market through active management.

In contrast, frequent trading of securities, active decision-making on investments, and conducting market research on potential investments are all characteristics associated with active management strategies. Active management involves continuously monitoring the portfolio and making decisions based on market conditions and research insights to try to achieve higher returns than a benchmark index.

Overall, passive management emphasizes a buy-and-hold strategy and reduces transaction costs, which often leads to better net returns for investors over time when compared to many active strategies.