An Active Managed Fund is a pool of money from investors that is controlled by a fund manager. This manager then uses his skill/resources/research to beat the market. A fee is charged for this experience. A Passive Fund is a pool of money from investors that is controlled mostly by a computer. The computer follows a market Index. The aim is to 100% match the index, with great care to avoid a "tracking error". A small fee is charged for this service. Which is better? Passive is cheaper, but only gets you the market. Active offers you the chance to beat the market. I have a theory that, passive needs active to survive. What are the reasons (and examples) where one fund is better than the other? What would make you swap? Cheers, Johny.