Whoo! Hi folks here we are once again. It's nearly the weekend and welcome to another five minute

Friday here on Meaningful Money.

Right, Claire has asked me a question about how to tell the difference between active and passive investment funds.

Specifically Claire was talking about her workplace pension. There she has a list of funds from which

she can choose but it's not immediately obvious to her which she should choose in

order to follow my general advice which is that passive

multi-asset portfolio funds are the best way to go for most people. So Claire how do you

tell the difference? It's a brilliant question and so let's try and answer it. So let's put five minutes on the clock down here.

Say a quick thank you to my friends at seven investment management down here for continuing to sponsor the show and let's crack on.

So let's do a very quick reminder of the difference between active and passive

investing because it's easy to get caught up in jargon and some of you watching or

listening to this won't understand the difference. So let's say that right now

you have determined that the footsy, which is the index of the 100 largest

companies registered here in the UK, it's a great place to invest right now.

I have no idea whether it is or not, the way because this video hopefully will be relatively timeless

so don't take that as an investment recommendation don't you hear me good but let's say you

decide that it's a good place to invest right now.

Now an active fund manager investing in the Futsi 100

we'll look at the 100 or so available stocks and say right I'm going to have that one that one that one that

one that one that one that one that one that one that one that one that one that one and

that one and that one and he or she will choose which of those 100 stocks they want to hold right now and which to buy and sell at any given time.

They are making an active decision of which stocks to buy and hold.

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