Investment portfolio management

Abstract

Investment portfolio management is the science of making decisions about asset management , matching investments to objectives, asset allocation for private investors (mutual funds or exchange-traded funds) and institutions ( insurance companies, pension funds, corporations, charities) and balancing risk against performance. Portfolio management, implies in tactfully managing an investment portfolio, by selecting the best investment mix in the right proportion and continuously shifting them in the portfolio, to increase the return on investment and maximize the wealth of the investor. In this section portfolio mix refers to a big range of financial products such as bonds, stocks, mutual funds and securities.

A person or a group of people, where are responsible for implementing its investment strategy and managing day to day portfolio trading are called portfolio manager or portfolio managing board. The main tasks of a portfolio manager are, to regulate the clients objective, to appoint the optimal asset classes (equities, bonds, stocks, real estate, private equity), handling strategic asset allocation, to conduct tactical asset allocation, to manage the risks and to measure the performance of the portfolio mix. According to a Boston Consulting Group study, the assets managed professionally for fees reached an all-time high of US$ 62.4 trillion in 2012, after remaining flat-lined since 2007. Furthermore, these industry assets under management were expected to reach US$ 90.2 trillion at the end of 2019.

A wide range of investments and financial products are available when building an investment portfolio. Those products are accessible for individual and institutional investors. Investors utilize investment products to meet various investment goals and objectives. The most well known investment products are: stocks and stock funds, bonds and bond funds and derivatives.

References

1. https://www.bcg.com/en-nor/industries/financial-institutions/default.aspx