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A portfolio manager chooses the securities in the portfolio in an attempt to replicate a benchmark. What type of investment strategy is this?

User Bojangles
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Final answer:

Passive investing involves replicating a benchmark to match its performance and is commonly done through index funds.

Step-by-step explanation:

The investment strategy that involves selecting securities in a portfolio to replicate a benchmark is called passive investing. In this strategy, a portfolio manager aims to match the performance of a specific index or benchmark, such as the S&P 500, rather than actively trying to outperform the market. One common approach to passive investing is investing in index funds, which are mutual funds that track the performance of a specific index. Index funds are designed to closely mimic the overall behaviour of the stock market, providing investors with broad exposure and diversification.

User Paul Spaulding
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