Active investing involves a team of experts or a fund manager who actively researches, filters, selects, and buys or sells stocks based on various criteria such as growth potential, company fundamentals, and market trends. The fund manager also decides how much concentration/weightage for a stock or sector needs to be maintained for the better growth. The goal is to generate higher returns over the long run and outperform a benchmark index (like the Nifty 50 or Sensex).

Passive investing involves tracking a market index (through index funds or ETFs) with the aim of achieving returns close to market average. This approach has lower fees and requires minimal ongoing management. It is ideal for cost-conscious investors who are comfortable earning returns that are in line with the broader market.