Lecture 3 (16). Chapter 2: Passive vs. Active Management

Every fund you buy makes one of two fundamental bets. Understanding which one you're making and what the evidence actually says about each, matters more than almost any other decision in this chapter.

The Core Distinction

A passive fund simply replicates a benchmark index: no attempt to pick winners, just own the whole market or segment as-is. You already know one intimately: Satrix DIVI from Chapter 1 does exactly this, tracking the FTSE/JSE Dividend Plus Index mechanically.