What is the focus of investment strategies that employ passive management?

Investment strategies that employ passive management primarily focus on tracking the performance of market indices. This approach is centered around the belief that markets are efficient and that it is challenging for fund managers to consistently outperform these indices over the long term. Therefore, passive management typically involves investing in index funds or exchange-traded funds (ETFs) that mirror the composition of a specific index, like the S&P 500.

By doing so, investors seek to capture the overall market returns rather than trying to beat the market through active stock selection or timing. This strategy often results in lower fees and expenses compared to active management, as there is less frequent buying and selling of securities. As a result, passive management is geared toward long-term investment growth that aligns with the market's overall performance rather than speculative trading or short-term gains.