Investment management is a branch of asset management, the specialization of which is focused on investing for growth and expansion. Investment management therefore is the discipline of asset management, the discipline of managing financial investments to gain maximum returns with minimum risk. Investment managers in financial services usually deal with the buying and selling of financial products such as financial derivatives, exchange traded funds, corporate bonds, mortgage-backed securities and asset-backed securities. Other specialized areas of investment management include futures and option markets, venture capital, venture investment, small business investment, bond markets, life insurance and pension.
One important concept of investment management is asset allocation, which involves the creation and maintenance of a personalized investment portfolio with the help of financial experts. This portfolio management uses several financial tools, including asset pricing models, asset allocation strategies, risk management techniques and strategies, and the use of financial engineering. It also involves generation of policy recommendations and financial monitoring. In order to accomplish the tasks involved, expert financial management advisors develop customized investment management plans for their clients, which are reviewed periodically to ensure that the investment portfolio is still viable and to ensure that the plan remains profitable. This also involves providing investment advice and suggestions to financial organizations and banks.
The basic function of investment management refers to the planning, allocation, measurement and evaluation of financial assets and liabilities. The key functions of this process include creating a portfolio of investments and equities, identifying potential risks and choosing the most suitable investments. Apart from this, it also involves liquidating securities to avoid outflows and lockups and holding investments until the time when they are required.