What does an asset manager do?
Who is the largest asset manager?
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What Is an Asset Manager?
An asset manager is a financial firm that oversees and invests money on behalf of clients, managing portfolios in accordance with their financial objectives and risk tolerance. In doing so, asset managers also consider additional elements such as the client’s income requirements, tax situation, and any personal investment preferences or characteristics, particularly for individual investors. While some asset management firms operate independently, many are subsidiaries of banks or insurance companies.
Because asset management is typically a customized and premium service that often requires a minimum investment threshold, its clients are usually high-net-worth individuals or institutional investors.
In addition to personalized wealth management, asset managers also provide collective investment products, such as mutual funds and exchange-traded funds (ETFs). These pooled investments are widely available and can be accessed by nearly any investor. Each fund follows a specific strategy or investment theme, allowing individuals to choose options that best match their goals—either independently or with guidance from a financial advisor.
A more recent trend in the industry is the rise of robo-advisors. These digital asset management platforms use algorithms to automatically build and manage an investment portfolio for clients. For a relatively low cost, they allocate assets according to the investor’s financial objectives and risk profile.
Asset managers
What does an asset manager do?
How Asset Managers Make Investment Decisions
Asset managers rely on detailed research and thorough analysis when deciding where to allocate investments.
They deploy capital from their clients across a broad spectrum of assets with the aim of growing the overall value of the portfolio. These investments may include traditional instruments such as stocks and bonds, as well as alternative assets like real estate, commodities, currencies, hedge funds, infrastructure projects, or private equity. Despite the variety of options available, equities and bonds still dominate global portfolios, accounting for nearly 80% of total allocations, according to research conducted by the Thinking Ahead Institute in partnership with Pensions & Investments.
Typically, investors place their funds into a dedicated account managed by the firm. The asset manager then executes trades—buying and selling securities or other instruments—based on the specific investment strategy designed for that client.
The same study notes that investors’ expectations for returns are steadily rising, which increasingly encourages the use of investment products that may involve higher levels of risk in pursuit of stronger performance.
Asset managers
Who is the largest asset manager?
BlackRock has been the world’s largest asset manager since 2009, according to the Thinking Ahead Institute’s ranking of the world’s 500 largest asset managers, based on total assets under management (AUM). Among runners-up, Vanguard and State Street have ranked consistently in the top three in recent years.
The biggest European asset managers include Germany’s Allianz Group, France’s Almundi and Switzerland-based UBS.
What else do you need to know about assets and asset classes?
If you’d like to broaden your knowledge, check out the following articles:
- Investment Asset Classes
- What are liquid assets?
- What are tangible assets?
- What are alternative investments?
- Are stocks liquid assets?
- What is asset allocation?