Portfolio Management

portfolio manager is a person who makes investment decisions using money other
people have placed under his or her control. In other words, it is a financial career
involved in investment management. They work with a team of analysts and researchers,
and are ultimately responsible for establishing an investment strategy, selecting
appropriate investments and allocating each investment properly for a fund- or asset-
management vehicle.

Portfolio managers are presented with investment ideas from internal buy-side analysts
and sell-side analysts from investment banks. It is their job to sift through the relevant
information and use their judgment to buy and sell securities. Throughout each day, they
read reports, talk to company managers and monitor industry and economic trends
looking for the right company and time to invest the portfolio's capital.

Portfolio managers make decisions about investment mix and policy, matching
investments to objectives, asset allocation for individuals and institutions, and balancing
risk against. performance.

Portfolio management is about strengths, weaknesses, opportunities and threats in the

choice of debt vs. equity, domestic vs. international, growth vs. safety, and other
tradeoffs encountered in the attempt to maximize return at a given appetite for risk.

In the case of mutual and exchange-traded funds (ETFs), there are two forms of portfolio
management: passive and active. Passive management simply tracks a market index,
commonly referred to as indexing or index investing. Active management involves a
single manager, co-managers, or a team of managers who attempt to beat the market
return by actively managing a fund's portfolio through investment decisions based on
research and decisions on individual holdings. Closed-end funds are generally actively
managed.