Pros
Actively managed funds These are funds with portfolio managers that select investments that seek to outperform a benchmark.	Opportunity for outperformance: As active funds aim to beat an index, they typically offer you the potential to make higher returns than benchmarks. Defensive measures: Managers have the ability to respond tactically to market opportunities. In other words, active managers can respond actively to changing market environments. Tax management: Active managers typically try to buy low and sell high, which can generate taxable gains. Some managers, however, also aim to harvest losses to minimize taxable distributions.
Index funds These are funds where managers aim to mimic a specific index, replicating its holdings and performance.	Low fees: Managerial oversight is generally less expensive, since managers are mostly mimicking what's already in the index. Transparency: Since index funds aim to track published indexes, which typically don't change frequently, it's usually clear what the fund likely holds at any time by looking at the index. Tax efficiency: An index fund's typical "buy and hold" strategy doesn't usually generate large capital gains taxes.