nvestment managementFrom Wikipedia, the free encyclopediaThis article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (October 2011)Investment management is the professional asset management of various securities (shares, bonds and other securities) and other assets (e.g., real estate) in order to meet specified investment goals for the benefit of the investors. Investors may be institutions (insurance companies, pension funds, corporations, charities, educational establishments etc.) or private investors (both directly via investment contracts and more commonly via collective investment schemes e.g. mutual funds or exchange-traded funds).he term asset management is often used to refer to the investment management of collective investments, !hile the more generic fund management may refer to all forms of institutional investment as !ell as investment management for private investors. Investment managers !ho speciali"e in advisory or discretionary management on behalf of (normally !ealthy) private investors may often refer to their services as money management or portfolio management often !ithin the context of so-called #private banking#.he provision of investment management services includes elements of financial statement analysis,asset selection, stock selection, plan implementation and ongoing monitoring of investments. $oming under the remit of financial services many of the !orld%s largest companies are at least in part investment managers and employ millions of staff.Fund manager (or investment advisor in the &nited 'tates) refers to both a firm that provides investment management services and an individual !ho directs fund management decisions.(ccording to a )oston $onsulting *roup study, the assets managed professionally for fees reached an all-time high of &'+,-.. trillion in -/0-, after remaining flat-lined since -//1.203 Furthermore, these industry assets under management !ere expected to reach &'+1/.- trillion at the end of -/04as per a $erulli (ssociates estimate.he global investment management industry is highly concentrated in nature, in a universe of about 1/,/// funds roughly 55.16 of the &' fund flo!s in -/0- !ent into 7ust 089 funds. (dditionally, a ma7ority of fund managers report that more than 9/6 of their inflo!s go to 7ust three funds.Contents2hide3 0Industry scopeo 0.0:ey problems of running such businesseso 0.-;epresenting the o!ners of shares -'i"e of the global fund management industry 4iversification 9Investment styles ,aily Fne 'ure Intraday Eot 'tock ip. *et TEE BANKING SECTOR A /an$in. setorper(or%s three pri%ar& (untions in an eono%&8 the operation o( the pa&%ent s&ste%! the %o/ili7ation o( sa+in.s and the alloation o( sa+in.s to in+est%ent proHets. B& alloatin. apital to the hi.hest +alue use 0hile li%itin. the ris$s and osts in+ol+ed! the /an$in. setor an e,ert a positi+e inIuene on the o+erall eono%&! and is thus o( /road %aroeono%i i%portane ?Bonin and #ahtel! 2333! p. 22CA Ja-e and Le+onian! @552! p. 24CA RaHan and Zin.ales! 2336! p. BB3A #ahtel! @552! p. CC3D. Sine the .eneral i%portane o( a /an$in. setor (or an eono%& is 0idel& aepted! the Kuestions arise under 0hih oordination %ehanis% L state or %ar$et L it /est per(or%s its (untions! and! i( neessar&! ho0 to %ana.e the transition to this oordination %ehanis% ?Ka%ins$& and Sh%u$ler!@55@! p. C5D. Currentl&! there are opposin. +ie0s onernin. the %ost pre(era/le oordination %ehanis%. Aordin. to the de+elop%ent and politial +ie0 o( state in+ol+e%ent in /an$in.! a .o+ern%ent is throu.h either diret o0nership o( /an$s or restritions on the operations o( /an$s /etter suited than %ar$et (ores alone to ensure that the /an$in. setor per(or%s its (untions. The ar.u%ent is essentiall& that the .o+ern%ent an ensure a /etter eono%i outo%e /& (or e,a%ple hannelin. sa+in.s to strate.i proHets that 0ould other0ise not reei+e (undin. or/& reatin. a /ranh in(rastruture in rural areas that 0ould not /e /uild /& pro1t"%a,i%i7in. pri+ate /an$s. The ati+e in+ol+e%ent o( .o+ern%ent thus ensures a /etter (untionin. o( the /an$in. setor! 0hih in turn has a .ro0th enhanin. e-et ?Arun and Turner! @55@! p. 3CA Deni7er! Desai and Gueor.uie+! 2336! p. @A Gershen$ron! 234@! pp. 23"@@A La 'orta! Lope7 de Silanes and Shlei(er! @55@! p. @44(.D. 2 The proponents o( 1nanial li/erali7ation ta$e an opposite stane. In their +ie0! repressi+e poliies suh as arti1iall& lo0 real interest rates! direted redit pro.ra%s and e,essi+e statutor& pre"e%ptions that are i%posed on /an$s ha+e ne.ati+e e-ets on /oth the +olu%e and the produti+it& o( in+est%ents. Re%o+in. these repressionist poliies and .i+in. %ore i%portane to %ar$et (ores 0ill! in the +ie0 o( the proponents o( 1nanial li/erali7ation! inrease 1nanial de+elop%ent and e+entuall& lead to hi.her eono%i .ro0th ?De%etriades and Luintel! 233=! p. C22A Deni7er! Desai and Gueor.uie+! 2336! p. CA Kin. and Le+ine! 233C! p. =C5A *Kinnon! 2332! p. 2@D. A %aHorit& o( e%pirial studies support the onlusion o( the1nanial li/erali7ation h&pothesis. The poli& reo%%endations arisin. (ro% these studies are e+ident8 a/olish%ent o( repressionist poliies and pri+ati7ation o( state"o0ned /an$s ?>r&! 233=! p. =46A Kin. and Le+ine! 233C! p. =Cinall&! the resultin. underde+elop%ent o( the /an$in. setor assoiated 0ith 1nanial repression %a& result in lo0er eono%i .ro0th ?*Kinnon! 2332! p. 22(.D. The poli& reo%%endation (or ountries usin. repressi+e poliies is to li/erali7e the /an$in. setor throu.h the re%o+al o( repressi+e poliies. Marious %easures ha+e /een proposed to ahie+e this .oal. >irst! real interest rates (or deposits and loans should /e %ar$et"deter%ined. This inludes the a/olition o( interest rate eilin.s and Ioors.Seond! redution o( reser+e reKuire%ents to the e,tent that is neessar& to ensure the sta/ilit& o( the 1nanial s&ste%. Third! disontinuation o( the %andated alloation o( redit to ertain setors ?>r&! 233=! p. =B4A *Kinnon! 2332! p. 2@A #ahtel! @552! p. CC=D. #hile li/erali7ation should entail (urther ele%ents suh as institution /uildin. or pri+ati7ation o( stateo0ned /an$s! the re%o+al o( repressionist poliies is ertainl& an i%portant step to0ards %ore %ar$etoriented /an$in.. India is a ase in point (or a ountr& 0here the .o+ern%ent used the desri/ed poliies to .ain ontrol o+er the /an$in. setor and inte.rate it in its o+erall de+elop%ent strate.&. The (ollo0in. setion .i+es an o+er+ie0 o+er the de+elop%ent o( the /an$in. setor in India. < DEMELO'*ENT O> TEE INDIAN BANKING SECTOR ro% Oto/er 233B! interest rates (or ter% deposits 0ith a %aturit& o( t0o &ears 0ere li/erali7ed. The %ini%u% %aturit& 0as su/seKuentl& lo0ered (ro% t0o &ears to 2B da&s in 2336. The ter% deposit rates 0ere (ull& li/erali7ed in 233=. As o( @55