What is invesment management?

Investment management is the professional management of financial assets and portfolios of securities, including the selection, analysis, and monitoring of investments. The goal of investment management is to maximize returns and manage risk for investors.

Investment managers, also known as asset managers, typically work for institutional investors, such as pension funds, endowments, and insurance companies, or for individual investors through mutual funds and other financial products.

There are different approaches to investment management, the most common being:

Active management: Investment managers actively select and trade securities in an effort to outperform a benchmark index or other benchmark, such as the S&P 500. This approach is also called security picking.


Passive management: Investment managers aim to replicate the performance of a benchmark index or other benchmark, such as the S&P 500, by holding a diversified portfolio of securities that closely mirrors the composition of the benchmark. This approach is also called indexing.

Investment managers typically use a variety of investment strategies, such as growth, value, income, and momentum, to build diversified portfolios that are tailored to the specific needs and objectives of their clients. They also employ risk management techniques to control the level of risk in the portfolios.

Overall, investment management is an important function that helps investors achieve their financial goals by selecting and managing a diversified portfolio of investments, in a way that balances the risk and return trade-off.