Passive/Active management

[aptx4869]

What are the difference btw passive/active management of asset class weight and passive/active management of allocation to asset classes?

I think they are pretty similar idea, in both cases, the active side means to change the composition of portfolio in response to price momentum, valuation, CME etc…

[fino_abama]

Refer to my reply here:

Differences between Tactical and dynamic asset allocation and active and passive choices

For the first dimension, is relative to the SAA. If you are being passive, then you will just stick to the SAA. If you are being active, then you will use TAA (short-term signals) /DAA (long-term valuation signals). For the second dimension, is relative to the manager’s benchmark. Being passive here means your portfolio allocation/security selections are the same as the benchmark (expected alpha = 0). Being active means your portfolio allocation/security selections are different from the ben…

[aptx4869]

that helps a lot, thx