---
title: "Active fund"
description: "An active fund is one whose manager selects holdings at their own discretion, aiming to outperform or manage risk against a benchmark rather than replicate it."
canonical: https://fundfactsapi.com/glossary/active-fund
published: 2026-09-04
updated: 2026-09-04
publisher: FundFacts API
---

# Active fund (Actively managed fund, Active management)

> An active fund is one whose manager selects holdings at their own discretion, aiming to outperform or manage risk against a benchmark rather than replicate it.

## Definition

An **active fund** is managed by a person or team who decide which securities to hold, in what weights and when to trade, based on research and judgement. It contrasts with an [index fund](https://fundfactsapi.com/glossary/index-fund), which follows a published index mechanically. Most active UCITS funds still name a [benchmark](https://fundfactsapi.com/glossary/benchmark) in their documents, either as a target to beat or as a reference for comparison, and European rules require them to say which.

## Why it matters

Active management is the main reason two funds in the same category can hold very different portfolios and charge different fees. Ongoing charges for active funds are generally higher than for index funds, and returns can diverge widely from the benchmark in both directions. Analysts therefore look at holdings, concentration, sector tilts and the fund's stated objective rather than the category label alone.

## In the API

The response classifies the fund in `profile.kind`, names the reference index in `benchmarkName`, and exposes cost and holdings data alongside. Example values:

```json
{
  "profile": { "kind": "active", "concentration": "high" },
  "benchmarkName": "MSCI World Index (Net Return)",
  "headlineMetrics": { "ter": 1.65 },
  "topHoldings": [{ "name": "Example Corp", "weight": 6.2 }]
}
```

`calendarReturns.fund` and `calendarReturns.benchmark` let you compute year-by-year relative performance without further lookups.

## Common pitfalls

A named benchmark does not mean the fund is managed close to it; a global equity fund may reference MSCI World while holding 30 stocks. Check `profile.concentration` and `topHoldings` before assuming benchmark-like behaviour. Read `investmentObjective` to see whether the benchmark is a target or merely a comparator.

## In the FundFacts API payload

- `profile.kind`
- `benchmarkName`
- `headlineMetrics.ter`
- `topHoldings`

## About FundFacts API

FundFacts turns any fund or ETF ISIN into one dated factsheet (fees and KID costs, the 1–7 risk indicator, holdings, sector and country exposure, returns) read from the fund house's own documents: as a client-ready PDF under your firm's name for advisers and wealth managers, as JSON through its API for developers, or inside ChatGPT and Claude through its MCP server.

FundFacts works inside ChatGPT and Claude as a connector (a remote MCP server): ask about any fund or ETF by ISIN, ticker or name and the assistant answers from FundFacts' dated figures, fees, risk, holdings, exposure and returns, with fund cards, side-by-side comparisons, holdings overlap and portfolio look-through.

- Free API key, no card: https://fundfactsapi.com/signup
- Documentation: https://fundfactsapi.com/docs (OpenAPI: https://fundfactsapi.com/openapi.json)
- MCP server: https://fundfactsapi.com/api/mcp (set-up for every client: https://fundfactsapi.com/mcp-server)
- Pricing: https://fundfactsapi.com/pricing
- Site index for AI assistants: https://fundfactsapi.com/llms.txt
- Informational data, not investment advice.