What Is the Buy-Side?

The financial institutions of a free-market economy include a segment called the buy-side: firms that
purchase investment securities. These include insurance firms, mutual funds, hedge funds, and pension
funds, that buy securities for their own accounts or for investors with the goal of generating a return.

Opposite of the buy-side professional is the sell-side. Unlike the buy-side, sell-side efforts do not include
making a direct investment. Instead, they assist the investing market with all activities related to the sale
of securities to the buy-side, such as underwriting for initial public offerings (IPOs), providing clearing
services, and generating research material and analysis

Jointly, these two sides (buy and sell) make up the main activities of financial markets.

Understanding the Buy-Side.

A buy-side firm will buy stocks, bonds, and other financial products based on the needs and strategy of
their company's or client's portfolio. The buy-side activity occurs in a variety of settings, not just the
financial institutions mentioned above. Trusts, equity funds, and high-net-worth individuals are also
included.

The goal of buy-side investing is to add value to a firm's clients. They accomplish this by locating and
purchasing underpriced assets that they believe will appreciate in value over time. Because the buy-side
involves purchasing large blocks of market securities, the most prestigious companies frequently have
significant market power. Investors and the media are also keeping a close eye on these market titans.

8.68 trillion dollars

-BlackRock's assets under management (AUM) as of December 31, 2020. In terms of assets, BlackRock is
the world's largest investment manager.

Firms such as BlackRock and Vanguard can significantly influence market prices by making large-scale
investments in single stocks. These investments, however, are typically not disclosed in real time and can
appear ghostly to market traders. The Securities and Exchange Commission's (SEC) 13F filing requires
buy-side managers to publicly disclose all holdings bought and sold each quarter.

Benefits of the Buy-Side

Buy-side investors have many advantages over other traders. They can place large-lot transactions that
minimize trading costs. They also have access to a very broad array of internal trading resources that
helps them to analyze, identify, and act on investment opportunities in real-time.

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