Active management is an investment strategy where a portfolio manager or team makes specific investment decisions to outperform a benchmark index. This approach involves researching and analyzing market trends, economic data, and individual securities to identify opportunities for higher returns. In contrast to passive management, which simply tracks an index like the S&P 500, active management requires ongoing adjustments to the portfolio based on market conditions. This strategy aims to capitalize on short-term price movements and inefficiencies in the market, potentially leading to greater gains for investors.