How it differs from an index fund
Whereas an index fund mechanically replicates the price movements of an index, an actively managed fund has the asset management company actively choose the fund's holdings and weightings. A key feature is that performance can be significantly affected by the skill of the management team.
What to keep in mind
Because more resources go into managing the fund, expense ratios tend to be set at a relatively higher level. Even if a fund's past performance has outperformed its benchmark, that does not guarantee similar results will continue in the future, so it is important to also check the fund's investment policy and cost level.