What type of fund is suitable for clients aiming to beat the market?

For clients looking to beat the market, an actively managed fund is the most suitable option. This type of fund is designed to outperform a specific benchmark or index through strategic decision-making by fund managers. These managers analyze market trends, individual securities, and economic conditions to identify investment opportunities that have the potential to generate higher returns than the overall market.

Active management allows for flexibility in investment strategies, enabling fund managers to buy or sell assets as they see fit, depending on market conditions and anticipated performance. This dynamic approach contrasts with passive funds and index funds, which aim to replicate the performance of a market index rather than exceed it.

In the context of this question, a fixed-income fund prioritizes stable returns through investments in bonds and similar securities, which is more about preserving capital than aggressively seeking to outperform the market. Options representing passive strategies, such as index funds or other forms of passive investing, focus on matching market returns rather than surpassing them. Thus, actively managed funds align best with the objective of clients wanting to achieve greater-than-market returns.