ANTH 2120 Lecture Notes - Manulife
Document Summary
It is an organization that pools large sums of money and buys securities such as stocks, bonds, real estate, etc. Examples include mutual funds, pension funds, insurance companies, hedge funds, investment companies, etc. Many employers deduct a portion of their employees" pay cheque and give this money to a 3rd party who will invest this for them. Pension funds provide retirement income for workers who have made contributions. Historically, pension funds buy lots of safe investments like government bonds and quality corporate bonds. In recent years, interest rates are very low which makes bonds less rewarding so now pension funds are taking more risk and buying a lot more stocks. Explain why insurance companies are considered institutional investors. Some are kept in cash to pay claims but most of the premiums are invested in stocks and bonds. Institutional investors own large volumes of shares & therefore have lots of votes in corporate decisions.
