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Smart Steps for the Perfect Wealth Formula

The management of financial assets or portfolio management is an activity which consists in managing funds placed by investors with the aim of making them grow over a given period. These funds can also be held directly. This practice must be done in full compliance with contractual and regulatory constraints and requires the application of investment policies issued by the shareholder in question.

The portfolio manager must also take into account the risks associated with such a practice in order to obtain the best return. The funds managed are often investment funds (FCP). Each of them is likely to attract several investors who are interested in the asset class. The company entrusted with the role of creating and managing the investment products is called the “Asset Manager”. You can go for the Evergreen Wealth Formula review  in that case.

The different types of asset management

From a legal standpoint, there are several types of asset management:

  • Management under mandate: the management company is fully responsible for portfolio management after a contract with the client. In this case, the management mandate is addressed to a single client, but it is possible to include rental management products.
  • Collective management: it offers UCITS, which are products aimed at many unitholders who acquire units.
  • Managed management: the management company is responsible for asset management, but it operates according to the client’s orders.

Products managed in Asset Management

Just as there are different types of management, we can also cite different products to manage:

  • Equity management: the manager invests mainly in stock market equities and is called upon to assess the return and the risks of his portfolio.
  • Management of interest rate products: investment in money market and bond products. The manager is called upon to assess the maturity of the investments.
  • Diversified management: portfolio diversification through investment in several asset categories.
  • Alternative management: consists of private equity and hedge funds (speculative management).

What are the interests of portfolio management?

First, asset management is a pillar of the existence of modern capital markets. Managers actually play an essential role as market promoters at the primary and secondary level, through their transactions. They therefore quickly participate in market liquidity by favoring price formation.

In addition, portfolio management makes it possible to apprehend risks more calmly. Risk is now seen as an important factor to consider in any investing activity. Knowing how to manage risk is part of the dynamic, and it can significantly improve performance. We are thus increasingly witnessing an aversion to taking risks.

Last Words

Despite everything, the strong and constant growth of assets maintains the need to manage risks in order to better value them, and even to secure them. In this case, we consider management as facilitators of risk taking, since they will allow them to be better understood by directing the investments of investors and allowing them to benefit from their rationality!

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