Portfolio manager
Encyclopedia
A portfolio manager is either a person who makes investment
decisions using money other people have placed under his or her control or a person who manages a financial institution's asset and liability (loan and deposit) portfolios.
On the investments side, they work with a team of analysts and researchers, and are ultimately responsible for establishing an investment strategy
, selecting appropriate investments and allocating each investment properly for a fund- or asset-management vehicle.
Portfolio managers are presented with investment ideas from internal buy-side analyst
s and sell-side analysts from investment banks. It is their job to sift through the relevant information and use their judgment to buy and sell securities
. Throughout each day, they read reports, talk to company managers and monitor industry
and economic
trends looking for the right company and time to invest the portfolio's
capital
.
A team of analysts and researchers are ultimately responsible for establishing an investment strategy
, selecting appropriate investments and allocating each investment properly for a fund or asset-management vehicle.
Portfolio managers make decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance.
Portfolio management is about strengths, weaknesses, opportunities and threats in the choice of debt vs. equity, domestic vs. international, growth vs. safety, and other tradeoffs encountered in the attempt to maximize return at a given appetite for risk.
In the case of mutual and exchange-traded funds (ETFs), there are two forms of portfolio management: passive and active. Passive management
simply tracks a market index, commonly referred to as indexing or index investing. Active management involves a single manager, co-managers, or a team of managers who attempt to beat the market return by actively managing a fund's portfolio through investment decisions based on research and decisions on individual holdings. Closed-end funds are generally actively managed..
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
decisions using money other people have placed under his or her control or a person who manages a financial institution's asset and liability (loan and deposit) portfolios.
On the investments side, they work with a team of analysts and researchers, and are ultimately responsible for establishing an investment strategy
Strategy
Strategy, a word of military origin, refers to a plan of action designed to achieve a particular goal. In military usage strategy is distinct from tactics, which are concerned with the conduct of an engagement, while strategy is concerned with how different engagements are linked...
, selecting appropriate investments and allocating each investment properly for a fund- or asset-management vehicle.
Portfolio managers are presented with investment ideas from internal buy-side analyst
Business analyst
A Business Analyst analyzes the organization and design of businesses, government departments, and non-profit organizations; BAs also assess business models and their integration with technology.-Levels:...
s and sell-side analysts from investment banks. It is their job to sift through the relevant information and use their judgment to buy and sell securities
Security (finance)
A security is generally a fungible, negotiable financial instrument representing financial value. Securities are broadly categorized into:* debt securities ,* equity securities, e.g., common stocks; and,...
. Throughout each day, they read reports, talk to company managers and monitor industry
Industry
Industry refers to the production of an economic good or service within an economy.-Industrial sectors:There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction,...
and economic
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
trends looking for the right company and time to invest the portfolio's
Portfolio (finance)
Portfolio is a financial term denoting a collection of investments held by an investment company, hedge fund, financial institution or individual.-Definition:The term portfolio refers to any collection of financial assets such as stocks, bonds and cash...
capital
Financial capital
Financial capital can refer to money used by entrepreneurs and businesses to buy what they need to make their products or provide their services or to that sector of the economy based on its operation, i.e. retail, corporate, investment banking, etc....
.
A team of analysts and researchers are ultimately responsible for establishing an investment strategy
Strategy
Strategy, a word of military origin, refers to a plan of action designed to achieve a particular goal. In military usage strategy is distinct from tactics, which are concerned with the conduct of an engagement, while strategy is concerned with how different engagements are linked...
, selecting appropriate investments and allocating each investment properly for a fund or asset-management vehicle.
Portfolio managers make decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance.
Portfolio management is about strengths, weaknesses, opportunities and threats in the choice of debt vs. equity, domestic vs. international, growth vs. safety, and other tradeoffs encountered in the attempt to maximize return at a given appetite for risk.
In the case of mutual and exchange-traded funds (ETFs), there are two forms of portfolio management: passive and active. Passive management
Passive management
Passive management is a financial strategy in which an investor invests in accordance with a pre-determined strategy that doesn't entail any forecasting...
simply tracks a market index, commonly referred to as indexing or index investing. Active management involves a single manager, co-managers, or a team of managers who attempt to beat the market return by actively managing a fund's portfolio through investment decisions based on research and decisions on individual holdings. Closed-end funds are generally actively managed..