The Savvy Investor Institutional Asset Management section covers insights through articles, white papers, and other formats on the asset management industry – further segmented to illuminate key aspects within the fund and investment management industry.
Asset management and investment management are usually used interchangeably; but there is a difference. Asset management typically deals in physical assets, overseeing a specialised investment instrument that is exclusive to investors. Investment management, however, is more of a generic, wider-reaching term, crossing over into the bigger financial spectrum...
Both management types facilitate decision-making processes which aim at maximising shareholder return to the investor yet do so in different ways.
Investment banks, for example, can access a wide range of traditional and alternative product offerings, which a typical investor is generally unable to do to the same extent. Their mandate operates as a dual function, serving appreciation of value to a clients’ portfolio over a period whilst minimising the exposure to risk. As there are minimum investment criteria, asset management is usually available to financial intermediaries, government bodies, high- and ultra-high-net worth individuals.
Investment management (also referred to as money, portfolio, and/or wealth management) is more than just the buying and selling of investment products. Management services seek to maximise short- or long-term portfolio strategies through acquisition and disposal – but also including banking, budget forecasting, and tax obligations.
Asset management pertains to:
- Market factor evaluation
- Investment research
- Returns analysis
- Client communication
Investment management pertains to:
- Creation of client portfolio objectives
- Investment decision-making
- Economic factor evaluation
- Active management (disposing of underperforming investments)
The asset/investment management industry relies heavily on harmony within the financial markets. Resolute transparency is often derived from investment processes, developed so that clients know what to expect from the management firm, and their portfolio. Given the nature of the CFA Institute, many management firms adhere to their Asset Manager Code of Professional Conduct guidelines, effectively regulating the ethical obligations imposed on investment process, and manager action.