What is active investing ? This method reacts to microtrends

What is active investing? This method reacts to microtrends. Bitcoin’s rebound above $64,000 lifted blockchain-related stocks 6%; active portfolios incorporated fintech names with direct exposure to crypto adoption. What happened? On Tuesday, BofA downgraded Nuscale Power Corp (NYSE:SMR) to Underperform with a $34 price target. Chris Koltek (CK): Passive investing has grown significantly over the past few years, and now it’s offered through ETFs, index mutual funds and segregated funds. I think at its core, passive investing offers three key benefits, a low cost, strong diversification and transparency. There’s a lower cost than active strategies, because there’s no active stock picking or research teams needed. They track a broad index like the S&P 500 or the MSCI World. They also provide broad diversification. You can own hundreds of securities across various sectors, geographies and market capitalizations. The diversification helps reduce unsystematic risk, or single company risk. For example, the risk of investing in a single company and that company losing a significant client or getting involved in some kind of a scandal. There’s also a high degree of clarity around what the index fund invests in. You know what they own. They track the index. That simplicity and efficiency make passive strategies a powerful tool for building long term wealth. What is active investing? It’s a constant race against benchmarks. U.S. retail sales up 0.8% in June triggered rallies in consumer discretionary names, prompting active managers to increase holdings in apparel and online retail stocks.