Question

A portfolio consists of three index funds: an equity index accounting for 40% of the total portfolio, a bond index accounting for 30% of the total portfolio, and an international index accounting for 30% of the total portfolio. After each quarter the portfolio manager buys and sells some of each sector to preserve the original weights for each sector. This is an example of ____________.

Answer 1

Answer:

a totally passively managed fund                                          

Explanation:

In simple words, A passively mantained portfolio usually follows a stock index, such as that of the S&P 500, but can also follow a particular segment or stock component. The explanation such investments are defined as passive is that the portfolio manager(s) lacks an aggressive policy to trade securities at ones convenience.

Passive management adherents think in the proposition of an effective market. It asserts that economies integrate all relevant data and represent this at all periods , making personal stock going to pick pointless.