Fund Asset Management Examined

Fund Asset Management

Fund asset management is used by investors and professionals who allocate funds to fund or wealth managers for investment across different asset classes. Fund asset management is generally undertaken by higher net wealth individuals who are seeking superior returns to that offered by bank deposits. Some superannuation or 401K programs also allocate funds to investment asset management companies that have expertise in this field.

Individual's select fund asset management companies according to their investment style and preferences. In the case of company sponsored plans, the choice for asset allocation can be limited by the products offered by the managing company. Traditionally, portfolio asset management is structured according to the individuals desire to have exposure to different asset sectors. This can include a mix of cash holdings, domestic or international shares and property funds.

Fund Asset Management

Fund asset management companies are usually mandated by their investment style and capital requirements. Some funds are capped up to a certain amount. Smaller companies generally enjoy more flexibility because they are not so limited by liquidity requirements. They have the opportunity to invest in smaller market capitalization securities which provides a more diverse range of investment options to choose from. Large funds are forced to choose for investment companies with larger capitalization. Entering into and existing large positions is an important consideration for their style and can limit the range of choice for asset selection.

Access to some asset management funds is restricted by minimum balance requirements. Firms that specialize to high net wealth individuals can require six or seven figure amounts before allocation. Smaller superannuation and 401K allocations are usually aligned with companies that do not have such restrictive entry requirements. They can employ different strategies to gain exposure to smaller companies that offer the potential for higher growth rates.

The investment styles of investment asset management companies are wide and varied. Index funds that track broad sector or country indexes, quantative funds that seeks to exploit the mispricing of securities and value/growth investing style comprise some of the mandates that fund asset management companies adopt. The style is usually determined by the fund management who setup and manage capital on behalf of clients.

Most working individuals will encounter some form of fund asset management throughout their life. Whether your looking to invest or plan your retirement, portfolio asset management can be used to achieve your goals. You can read some additional articles on this website to learn more about asset and hedge fund management.

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