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Investment management is the professional
asset management Asset management refers to a systematic approach to the governance and realization of value from the things that a group or entity is responsible for, over their whole life cycles. It may apply both to tangible asset In financial accountancy, f ...
of various
securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...
, including shareholdings, bonds, and other
asset In financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such a ...
s, such as
real estate Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more genera ...

real estate
, in order to meet specified
investment Investment is the dedication of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance Finance is the study of financial institution ...

investment
goals for the benefit of investors. Investors may be institutions, such as insurance companies, pension funds, corporations, charities, educational establishments, or private investors, either directly via investment contracts or, more commonly, via
collective investment scheme Image:Financial info.jpg, The values and performance of collective funds are listed in newspapers. An investment fund is a way of investment, investing money alongside other investors in order to benefit from the inherent advantages of working as p ...
s like
mutual fund A mutual fund is a professionally managed investment fund An investment fund is a way of investment, investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group such as reducing the ri ...
s,
exchange-traded fund An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the da ...
s, or
REIT A real estate investment trust (REIT) is a company that owns, and in most cases operates, income-producing real estate Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minera ...
s. The term
asset management Asset management refers to a systematic approach to the governance and realization of value from the things that a group or entity is responsible for, over their whole life cycles. It may apply both to tangible asset In financial accountancy, f ...
is often used to refer to the management of
investment fund An investment fund is a way of investment, investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group such as reducing the risks of the investment by a significant percentage. These ad ...
s, while the more generic term fund management may refer to all forms of institutional investment, as well as investment management for private investors. Investment managers who specialize in ''advisory'' or ''discretionary'' management on behalf of (normally wealthy) private investors may often refer to their services as
money management Money management is the process of expense tracking, investing, budgeting, banking and evaluating taxes of one's money which is also called investment management Investment management is the professional asset management of various securities ...
or portfolio management often within the context of "
private banking Private banking is bank A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indir ...
".
Wealth management Wealth management (WM) or wealth management advisory (WMA) provides services to a wide array of clients ranging from affluent Wealth is the abundance of valuable financial asset A financial asset is a non-physical asset In financial accountan ...
by financial advisors takes a more holistic view of a client, with allocations to particular asset management strategies. The term fund manager, or
investment adviser A financial adviser or financial advisor is a professional who provides financial services to clients based on their financial situation. In many countries, financial advisors must complete specific training and be registered with a regulatory b ...
in the United States, refers to both a firm that provides investment management services and to the individual who directs fund management decisions. According to a
Boston Consulting Group Boston Consulting Group (BCG) is an American management consulting Management consulting is the practice of helping organization An organization, or organisation ( Commonwealth English; see spelling differences), is an entity – such ...
study, the assets managed professionally for fees reached a historic high of US$62.4 trillion in 2012, after remaining flat since 2007, and were then expected to reach US$70.2 trillion a year later. The five largest asset managers are holding 22.7 percent of the externally held assets. Nevertheless, the market concentration, measured via the Herfindahl-Hirschmann Index, could be estimated at 173.4 in 2018, showing that the industry is not very concentrated.


Industry scope

The business of investment has several facets, the employment of professional fund managers, research (of individual assets and
asset classes In finance, an asset class is a group of financial instrument Financial instruments are monetary Contract, contracts between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership inter ...
), dealing, settlement, marketing,
internal audit Internal auditing is an independent, objective assurance services, assurance and Consultant, consulting activity designed to add value to and improve an organization's operations. It may help an organization accomplish its objectives by bringing a ...
ing, and the preparation of reports for clients. The largest financial fund managers are firms that exhibit all the complexity their size demands. Apart from the people who bring in the money (marketers) and the people who direct investment (the fund managers), there are compliance staff (to ensure accord with legislative and regulatory constraints), internal auditors of various kinds (to examine internal systems and controls), financial controllers (to account for the institutions' own money and costs), computer experts, and "back office" employees (to track and record transactions and fund valuations for up to thousands of clients per institution).


Key problems of running such businesses

Key problems include: * revenue is directly linked to market valuations, so a major fall in asset prices can cause a precipitous decline in revenues relative to costs; * above-average fund performance is difficult to sustain, and clients may not be patient during times of poor performance; * successful fund managers are expensive and may be headhunted by competitors; * above-average fund performance appears to be dependent on the unique skills of the fund manager; however, clients are loath to stake their investments on the ability of a few individuals- they would rather see firm-wide success, attributable to a single philosophy and internal discipline; * analysts who generate above-average returns often become sufficiently wealthy that they avoid corporate employment in favor of managing their personal portfolios.


Representing the owners of shares

Institutions often control huge shareholdings. In most cases, they are acting as fiduciary agents rather than principals (direct owners). The owners of shares theoretically have great power to alter the companies via the voting rights the shares carry and the consequent ability to pressure managements, and if necessary out-vote them at annual and other meetings. In practice, the ultimate owners of shares often do not exercise the power they collectively hold (because the owners are many, each with small holdings); financial institutions (as agents) sometimes do. There is a general belief that shareholders – in this case, the institutions acting as agents—could and should exercise more active influence over the companies in which they hold shares (e.g., to hold managers to account, to ensure Board's effective functioning). Such action would add a
pressure group Advocacy groups, also known as special interest groups, use various forms of advocacy in order to influence public opinion and ultimately policy. They play an important role in the development of political and social systems. Motives for actio ...
to those (the regulators and the Board) overseeing management. However, there is the problem of how the institution should exercise this power. One way is for the institution to decide, the other is for the institution to poll its beneficiaries. Assuming that the institution polls, should it then: (i) Vote the entire holding as directed by the majority of votes cast? (ii) Split the vote (where this is allowed) according to the proportions of the vote? (iii) Or respect the abstainers and only vote the respondents' holdings? The price signals generated by large active managers holding or not holding the stock may contribute to management change. For example, this is the case when a large active manager sells his position in a company, leading to (possibly) a decline in the stock price, but more importantly a loss of confidence by the markets in the management of the company, thus precipitating changes in the management team. Some institutions have been more vocal and active in pursuing such matters; for instance, some firms believe that there are investment advantages to accumulating substantial minority shareholdings (i.e. 10% or more) and putting pressure on
management Management (or managing) is the administration of an organization An organization, or organisation (Commonwealth English The use of the English language English is a West Germanic languages, West Germanic language first spok ...

management
to implement significant changes in the business. In some cases, institutions with minority holdings work together to force management change. Perhaps more frequent is the sustained pressure that large institutions bring to bear on management teams through persuasive discourse and PR. On the other hand, some of the largest investment managers—such as
BlackRock BlackRock, Inc. is an American multinational investment management corporation based in New York City New York City (NYC), often simply called New York, is the List of United States cities by population, most populous city in the Unite ...
and
Vanguard The vanguard (also called the advance guard) is the leading part of an advancing military formation Military organization or military organisation is the structuring of the armed forces of a state so as to offer such military capability as a ...
—advocate simply owning every company, reducing the incentive to influence management teams. A reason for this last strategy is that the investment manager prefers a closer, more open, and honest relationship with a company's management team than would exist if they exercised control; allowing them to make a better investment decision. The national context in which shareholder representation considerations are set is variable and important. The USA is a litigious society and shareholders use the
law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by its bounda ...
as a lever to pressure management teams. In Japan, it is traditional for shareholders to be low in the 'pecking order,' which often allows management and labor to ignore the rights of the ultimate owners. Whereas US firms generally cater to shareholders, Japanese businesses generally exhibit a ''stakeholder'' mentality, in which they seek consensus amongst all interested parties (against a background of strong unions and labour
legislation Legislation is the process or product of enrolling, enacting, or promulgating Promulgation is the formal proclamation or the declaration that a new statute, statutory or administrative law is enacted after its final Enactment of a bill, appro ...
).


Size of the global fund management industry

Conventional
assets under management In finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and investments. Savers and investors have money available ...
of the global fund management industry increased by 10% in 2010, to $79.3 trillion.
Pension A pension (, from Latin Latin (, or , ) is a classical language A classical language is a language A language is a structured system of communication Communication (from Latin ''communicare'', meaning "to share" or "to be ...

Pension
assets accounted for $29.9 trillion of the total, with $24.7 trillion invested in mutual funds and $24.6 trillion in insurance funds. Together with alternative assets (sovereign wealth funds, hedge funds, private equity funds, and exchange traded funds) and funds of wealthy individuals, assets of the global fund management industry totalled around $117 trillion. Growth in 2010 followed a 14% increase in the previous year and was due both to the recovery in equity markets during the year and an inflow of new funds. The US remained by far the biggest source of funds, accounting for around a half of conventional
assets under management In finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and investments. Savers and investors have money available ...
or some $36 trillion. The UK was the second largest centre in the world and by far the largest in Europe with around 8% of the global total.


Philosophy, process and people

The 3-P's (Philosophy, Process, and People) are often used to describe the reasons why the manager is able to produce above average results. * Philosophy refers to the overarching beliefs of the investment organization. For example: (i) Does the manager buy growth or value shares, or a combination of the two (and why)? (ii) Do they believe in market timing (and on what evidence)? (iii) Do they rely on external research or do they employ a team of researchers? It is helpful if any and all of such fundamental beliefs are supported by proof-statements. * Process refers to the way in which the overall philosophy is implemented. For example: (i) Which universe of assets is explored before particular assets are chosen as suitable investments? (ii) How does the manager decide what to buy and when? (iii) How does the manager decide what to sell and when? (iv) Who takes the decisions and are they taken by committee? (v) What controls are in place to ensure that a rogue fund (one very different from others and from what is intended) cannot arise? * People refers to the staff, especially the fund managers. The questions are, Who are they? How are they selected? How old are they? Who reports to whom? How deep is the team (and do all the members understand the philosophy and process they are supposed to be using)? And most important of all, How long has the team been working together? This last question is vital because whatever performance record was presented at the outset of the relationship with the client may or may not relate to (have been produced by) a team that is still in place. If the team has changed greatly (high staff turnover or changes to the team), then arguably the performance record is completely unrelated to the existing team (of fund managers).


Investment managers and portfolio structures

At the heart of the investment management industry are the managers who invest and divest client investments. A certified company investment advisor should conduct an assessment of each client's individual needs and risk profile. The advisor then recommends appropriate investments.


Asset allocation

The different
asset class In finance, an asset class is a group of financial instrument Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money I ...
definitions are widely debated, but four common divisions are
stock In finance, stock (also capital stock) consists of all of the shares In financial markets A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities i ...

stock
s, bonds,
real estate Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more genera ...

real estate
, and
commodities In economics, a commodity is an economic goods, good, usually a resource, that has full or substantial fungibility: that is, the Market (economics), market treats instances of the good as equivalent or nearly so with no regard to who Production ...
. The exercise of allocating funds among these assets (and among individual securities within each asset class) is what investment management firms are paid for. Asset classes exhibit different market dynamics, and different interaction effects; thus, the allocation of the money among asset classes will have a significant effect on the performance of the fund. Some research suggests that allocation among asset classes has more predictive power than the choice of individual holdings in determining portfolio return. Arguably, the skill of a successful investment manager resides in constructing the asset allocation, and separate individual holdings, so as to outperform certain benchmarks (e.g., the peer group of competing funds, bond, and stock indices).


Long-term returns

It is important to look at the evidence on the long-term returns to different assets, and to holding period returns (the returns that accrue on average over different lengths of investment). For example, over very long holding periods (e.g. 10+ years) in most countries, equities have generated higher returns than bonds, and bonds have generated higher returns than cash. According to financial theory, this is because equities are riskier (more volatile) than bonds which are themselves more risky than cash.


Diversification

Against the background of the asset allocation, fund managers consider the degree of
diversification Diversification may refer to: Biology and agriculture * Genetic divergence, emergence of subpopulations that have accumulated independent genetic changes * Agricultural diversification involves the re-allocation of some of a farm's resources to ne ...
that makes sense for a given client (given its risk preferences) and construct a list of planned holdings accordingly. The list will indicate what percentage of the fund should be invested in each particular stock or bond. The theory of portfolio diversification was originated by Markowitz (and many others). Effective diversification requires management of the correlation between the asset returns and the liability returns, issues internal to the portfolio (individual holdings volatility), and
cross-correlation In signal processing Signal processing is an electrical engineering subfield that focuses on analysing, modifying, and synthesizing signals such as audio signal processing, sound, image processing, images, and scientific measurements. Signal ...

cross-correlation
s between the returns.


Investment styles

There are a range of different
styles Style is a manner of doing or presenting things and may refer to: * Architectural style, the features that make a building or structure historically identifiable * Design, the process of creating something * Fashion, a prevailing mode of clothing s ...
of fund management that the institution can implement. For example, growth, value, growth at a reasonable price (GARP),
market neutralAn investment strategyIn finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and investments. Savers and investors ...
, small capitalisation, indexed, etc. Each of these approaches has its distinctive features, adherents and, in any particular financial environment, distinctive risk characteristics. For example, there is evidence that growth styles (buying rapidly growing earnings) are especially effective when the companies able to generate such growth are scarce; conversely, when such growth is plentiful, then there is evidence that value styles tend to outperform the indices particularly successfully. Large asset managers are increasingly profiling their equity portfolio managers to trade their orders more effectively. While this strategy is less effective with small-cap trades, it has been effective for portfolios with large-cap companies.


Performance measurement

Fund
performance A performance is an act of staging or presenting a play, concert, or other form of entertainment. It is also defined as the action or process of carrying out or accomplishing an action, task, or function. Management science In the work place ...

performance
is often thought to be the acid test of fund management, and in the institutional context, accurate measurement is a necessity. For that purpose, institutions measure the performance of each fund (and usually for internal purposes components of each fund) under their management, and performance is also measured by external firms that specialize in performance measurement. The leading performance measurement firms (e.g. Russell Investment Group in the US or BI-SAM in Europe) compile aggregate industry data, e.g., showing how funds in general performed against given
performance A performance is an act of staging or presenting a play, concert, or other form of entertainment. It is also defined as the action or process of carrying out or accomplishing an action, task, or function. Management science In the work place ...

performance
indices and peer groups over various time periods. In a typical case (let us say an
equity fund A stock fund, or equity fund, is a investment scheme, fund that invests in stocks, also called equity Security (finance), securities. Stock funds can be contrasted with bond funds and money funds. Fund assets are typically mainly in stock, with som ...
), the calculation would be made (as far as the client is concerned) every quarter and would show a percentage change compared with the prior quarter (e.g., +4.6% total return in US dollars). This figure would be compared with other similar funds managed within the institution (for purposes of monitoring internal controls), with performance data for peer group funds, and with relevant indices (where available) or tailor-made performance benchmarks where appropriate. The specialist performance measurement firms calculate quartile and
decileIn descriptive statistics A descriptive statistic (in the count noun sense) is a summary statistic that quantitatively describes or summarizes features from a collection of information, while descriptive statistics (in the mass noun sense) is the pr ...
data and close attention would be paid to the (percentile) ranking of any fund. It is probably appropriate for an investment firm to persuade its clients to assess performance over longer periods (e.g., 3 to 5 years) to smooth out very short-term fluctuations in performance and the influence of the business cycle. This can be difficult however and, industry wide, there is a serious preoccupation with short-term numbers and the effect on the relationship with clients (and resultant business risks for the institutions). One effective solution to this problem is to include a minimum evaluation-period in the investment management agreement, whereby the minimum evaluation period equals the investment manager's investment horizon. An enduring problem is whether to measure before-tax or after-tax performance. After-tax measurement represents the benefit to the investor, but investors' tax positions may vary. Before-tax measurement can be misleading, especially in regimens that tax realised capital gains (and not unrealised). It is thus possible that successful active managers (measured before tax) may produce miserable after-tax results. One possible solution is to report the after-tax position of some standard taxpayer.


Risk-adjusted performance measurement

Performance measurement should not be reduced to the evaluation of fund returns alone, but must also integrate other fund elements that would be of interest to investors, such as the measure of risk taken. Several other aspects are also part of performance measurement: evaluating if managers have succeeded in reaching their objective, i.e. if their return was sufficiently high to reward the risks taken; how they compare to their peers; and finally, whether the portfolio management results were due to luck or the manager's skill. The need to answer all these questions has led to the development of more sophisticated performance measures, many of which originate in
modern portfolio theory Modern portfolio theory (MPT), or mean-variance analysis, is a mathematical framework for assembling a portfolio of assets such that the expected return is maximized for a given level of risk. It is a formalization and extension of Diversification ...
. Modern portfolio theory established the quantitative link that exists between portfolio risk and return. The
capital asset pricing model In finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and investments. Savers and investors have money availab ...
(CAPM) developed by Sharpe (1964) highlighted the notion of rewarding risk and produced the first performance indicators, be they risk-adjusted ratios (
Sharpe ratio In finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and investments. Savers and investors have money available ...
, information ratio) or differential returns compared to benchmarks (alphas). The Sharpe ratio is the simplest and best known performance measure. It measures the return of a portfolio in excess of the risk-free rate, compared to the total risk of the portfolio. This measure is said to be absolute, as it does not refer to any benchmark, avoiding drawbacks related to a poor choice of benchmark. Meanwhile, it does not allow the separation of the performance of the market in which the portfolio is invested from that of the manager. The information ratio is a more general form of the Sharpe ratio in which the risk-free asset is replaced by a benchmark portfolio. This measure is relative, as it evaluates portfolio performance in reference to a benchmark, making the result strongly dependent on this benchmark choice. Portfolio alpha is obtained by measuring the difference between the return of the portfolio and that of a benchmark portfolio. This measure appears to be the only reliable performance measure to evaluate active management. In fact, we have to distinguish between normal returns, provided by the fair reward for portfolio exposure to different risks, and obtained through passive management, from abnormal performance (or outperformance) due to the manager's skill (or luck), whether through
market timing Market timing is the strategy Strategy (from Greek στρατηγία ''stratēgia'', "art of troop leader; office of general, command, generalship") is a general plan to achieve one or more long-term or overall goals under conditions of uncerta ...
, stock picking, or good fortune. The first component is related to allocation and style investment choices, which may not be under the sole control of the manager, and depends on the economic context, while the second component is an evaluation of the success of the manager's decisions. Only the latter, measured by alpha, allows the evaluation of the manager's true performance (but then, only if you assume that any outperformance is due to skill and not luck). Portfolio return may be evaluated using factor models. The first model, proposed by Jensen (1968), relies on the CAPM and explains portfolio returns with the market index as the only factor. It quickly becomes clear, however, that one factor is not enough to explain the returns very well and that other factors have to be considered. Multi-factor models were developed as an alternative to the CAPM, allowing a better description of portfolio risks and a more accurate evaluation of a portfolio's performance. For example, Fama and French (1993) have highlighted two important factors that characterize a company's risk in addition to market risk. These factors are the book-to-market ratio and the company's size as measured by its market capitalization. Fama and French therefore proposed three-factor model to describe portfolio normal returns (
Fama–French three-factor model In asset pricing :'' This article is theory focused: for the corporate finance Corporate finance is the area of finance that deals with sources of funding, the capital structure of corporations, the actions that managers take to increase the Valu ...
). Carhart (1997) proposed to add momentum as a fourth factor to allow the short-term persistence of returns to be taken into account. Also of interest for performance measurement is Sharpe's (1992) style analysis model, in which factors are style indices. This model allows a custom benchmark for each portfolio to be developed, using the linear combination of style indices that best replicate portfolio style allocation, and leads to an accurate evaluation of portfolio alpha.


Education or certification

At the
undergraduate Undergraduate education ieducationconducted after secondary education and prior to postgraduate education. It typically includes all postsecondary programs up to the level of a bachelor's degree. For example, in the United States, an entry-level ...
level, several
business school A business school is a university-level institution that confers degrees in business administration Business administration (also known as business management) is the administration of a commercial enterprise. It includes all aspects of overse ...

business school
s and universities internationally offer "Investments" as a subject within their degree; some universities, in fact, have formulated the title of 'Investment Management' or 'Asset Management' conferred as a specialist
bachelor's degree A bachelor's degree (from Middle Latin Medieval Latin was the form of Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area ...
Increasingly, those with aspirations to work as an investment manager, require further education beyond a bachelor's degree in business, finance, or economics. *Designations such as the
Chartered Financial Analyst The Chartered Financial Analyst (CFA) program is a Postgraduate education, postgraduate professional certification offered internationally by the American-based CFA Institute (formerly the Association for Investment Management and Research, or AIMR) ...
(CFA), internationally, or the more local Chartered Investment Manager (CIM) in Canada, and the Certified International Investment Analyst (CIIA) in Europe and Asia, are increasingly required for advancement; even to gain entry level positions in the industry, enrollment / partial completion of exams is often helpful. *Further, a
graduate degree Postgraduate education (graduate education in North America North America is a continent A continent is any of several large landmasses. Generally identified by convention (norm), convention rather than any strict criteria, u ...
- typically the
MBA A Master of Business Administration (MBA; also Master's in Business Administration) is a graduate degree Postgraduate education (graduate education in North America) involves learning and studying for Academic degree, academic or profession ...
or MSF, or the more specialized
Masters in Investment Management
Masters in Investment Management
- may also be required for advancement to senior roles; and lately for entry level roles. There is evidence that any particular qualification enhances the most desirable characteristic of an investment manager, that is, the ability to select investments that result in an above average (risk weighted) long-term performance.


Comparison to wealth management

Wealth management Wealth management (WM) or wealth management advisory (WMA) provides services to a wide array of clients ranging from affluent Wealth is the abundance of valuable financial asset A financial asset is a non-physical asset In financial accountan ...
, where
financial advisors A financial adviser or financial advisor is a professional who provides financial services to clients based on their financial situation. In many countries, financial advisors must complete specific training and be registered with a regulatory bo ...
perform
financial plan In general usage, a financial plan is a comprehensive evaluation of an individual's current pay and future financial state by using current known variables to predict future income, asset values and withdrawal plans. This often includes a budge ...
ning for clients, has traditionally served as an intermediary to investment managers in the United States and less so in Europe. However, as of 2019, the lines were becoming blurred.


See also

*
Active management Active management (also called ''active investing'') refers to a portfolio management strategy where the manager makes specific investments with the goal of outperforming an investment benchmark index or target return. In passive management, inve ...
* Alpha capture system *
Asset management company An asset management company (AMC) is an asset management / investment management company/firm that invests the pooled funds of retail investors in securities in line with the stated investment objectives. For a fee, the company/firm provides more D ...
*
Corporate governance Corporate governance is the collection of mechanisms, processes and relations used by various parties to control and to operate a corporation A corporation is an organization—usually a group of people or a company—authorized by the St ...
*
Exchange fund An exchange fund or swap fund is a mechanism specific to the United States, U.S., first introduced in the late 1960s, that allows holders of a large amount of a single stock to diversify into a basket of other stocks without directly selling their s ...
*
Exchange-traded fund An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the da ...
* Factor investing *
Financial management Financial management may be defined as the area or function in an organization which is concerned with profitability, expenses, cash and credit, so that the "organization may have the means to carry out its objective as satisfactorily as possibl ...
*
Fund governanceFund governance refers to a system of checks and balances and work performed by the governing body (board) of an investment fund 200px, thumbnail, The values and performance of collective funds are listed in newspapers An investment fund is a way of ...
*
Investment Investment is the dedication of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance Finance is the study of financial institution ...

Investment
*
List of asset management firms An asset management company (AMC) is an asset management / investment management company/firm that invests the pooled funds of retail investors in securities in line with the stated investment objectives. For a fee, the company/firm provides more D ...
*
Passive management Passive management (also called passive investing) is an investing strategy that tracks a market-weighted index or portfolio. Passive management is most common on the equity market, where index funds track a stock market index 300px, A comparison ...
*
Pension fund A pension fund, also known as a superannuation fund in some countries, is any plan, fund, or scheme which provides pension, retirement income. Pension funds typically have large amounts of money to invest and are the major investors in listed an ...
*
Portfolio Portfolio may refer to: Objects * Portfolio (briefcase), a type of briefcase Collections * Portfolio (finance) In finance, a portfolio is a collection of investments To invest is to allocate money Image:National-Debt-Gillray.jpeg, ...
*
Private equity Private equity (PE) typically refers to investment funds, generally organized as limited partnerships, that buy and restructure companies that are not publicly traded. Private equity is a type of equity and one of the asset classes consisti ...
*
Quantitative investing A quantitative fund is an investment fund in which investment decisions are determined by numerical methods rather than by human judgment. See . Quantitative investment process :''See for a listing of relevant articles.'' An investment process may ...
*
Securities lending In finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and investments. Savers and investors have money available ...
*
Separately managed accountIn the investment management Investment management is the professional asset management of various securities, including shareholdings, bonds, and other asset In financial accountancy, financial accounting, an asset is any resource owned or con ...
*
Sovereign Wealth Fund A sovereign wealth fund (SWF), sovereign investment fund, or social wealth fund is a state-owned investment fund that invests in real and financial assets such as stocks, Bond (finance), bonds, real estate, precious metals, or in alternative inve ...
*
Transition management Transition management, in the financial sense, is a service usually offered by sell side institutions to help buy side firms transition a portfolio of Security (finance), securities. Various events including Mergers and acquisitions, acquisitions a ...
*


References


Further reading

* *
David Swensen David F. Swensen (born 1954) is an American investor, Financial endowment, endowment fund manager, and philanthropist. He has been the chief investment officer at Yale University since 1985. Swensen is responsible for managing and investing Yale ...
, "Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment," New York, NY: The Free Press, May 2000. * Rex A. Sinquefeld and Roger G. Ibbotson, Annual Yearbooks dealing with Stocks, Bonds, Bills and Inflation (relevant to long-term returns to US financial assets). *
Harry Markowitz Harry Max Markowitz (born August 24, 1927) is an American economist who received the 1989 John von Neumann Theory Prize The John von Neumann Theory Prize of the Institute for Operations Research and the Management Sciences The Institute for Op ...
, Portfolio Selection: Efficient Diversification of Investments, New Haven: Yale University Press * S.N. Levine, The Investment Managers Handbook, Irwin Professional Publishing (May 1980), . * V. Le Sourd, 2007, "Performance Measurement for Traditional Investment – Literature Survey", EDHEC Publication. * D. Broby, "A Guide to Fund Management", Risk Books, (Aug 2010), . * C. D. Ellis, "A New Paradigm: The Evolution of Investment Management." Financial Analysts Journal, vol. 48, no. 2 (March/April 1992):16–18. * *


External links


Investment Company Institute
– US industry body
Investment Management Association
– UK industry body {{Financial risk