Topic 12 - 1 Asset Management Anna Obizhaeva BMGT 343:...

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Unformatted text preview: 1 Asset Management Anna Obizhaeva BMGT 343: Investments Prof. Anna Obizhaeva Office: VMH 4428 Phone: (301) 405-7934 Email: obizhaeva@rhsmith.umd.edu Section 0101 T Th 9:30-10:45 am in VMH 1336 Section 0201 T Th 11:00-12:15 pm in VMH 1336 Section 0301 T Th 12:30-1:45 pm in VMH 1336 Office Hours : Thu 3:00-4:00 am or by appointment Asset Management Anna Obizhaeva Asset Management Topic 12: Asset Management 2 Asset Management Anna Obizhaeva Outline for Topic 12- Overview- Mutual Funds- Index Funds- Hedge Funds- Sovereign Wealth Funds- Funds Performance Asset Management Anna Obizhaeva 1. Overview Asset management belongs to the buy-side of financial markets. It means the professional management of various securities and assets to meet specified investment goal for the benefit of various investors . The buy-side makes money through growth of assets under management. In contrast, the sell-side refers to the functions of investment banks, which recommend, trade and sell securities for the investors on the buy-side. The sell-side can be thought as a facilitator of buy-side investments. It is compensated through fees and commissions for these facilitating services. 3 Asset Management Anna Obizhaeva Asset Management Buy Side in Financial Markets FINANCIAL INTERMEDIARIES HOUSEHOLDS CAPITAL MARKETS NONFINANCIAL CORPORATIONS PRODUCT MARKETS LABOR MARKETS DOMAIN OF FINANCIAL TECHNOLOGY Asset management belongs to the buy side of financial markets. Asset Management Anna Obizhaeva Asset Management: Industry Overview Demanders of Asset Management Services- Households,- Institutions: Pension Plans, Trusts, Endowments etc.- Countries. Providers of Asset Management Services- Mutual Funds (individuals), Hedge Funds (rich individuals),- Asset Management Companies (institutions),- Sovereign Wealth Funds (countries). Also: Consultants, Credit Rating Agencies, Banks etc. 4 Asset Management Anna Obizhaeva 2. Mutual Funds A mutual fund is a professionally managed type of a collective investment scheme that pools money from investors and invests it into stocks, bonds, and other securities. Asset Management Anna Obizhaeva Mutual Funds: History The first mutual, or open-end fund in which new shares are issued as new money is invested was established in Boston in 1924. While a handful of mutual funds were formed during the 1920s, funds managed only $140 million by year-end 1929. Currently, the worldwide value of all mutual funds is about $26 trillion. The value of the US mutual funds is about $12 trillion. 5 Asset Management Anna Obizhaeva Mutual Funds: Operations At the end of every day, the fund issues new shares to investors and buy back shares from investors who wish to leave the fund....
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Topic 12 - 1 Asset Management Anna Obizhaeva BMGT 343:...

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