Institutional investors in function of financial markets development

Abstract

Management of institutional investors implies market economy as well as the existence of transparent financial market and its segments (money market, capital market, foreign money market, derivative securities market etc). The financial market and its segments make effective mobilization of even the lowest amounts of temporarily free funds of the population, economy and the state possible for their involvement i.e. allocation into financial flows of the market economy. At the same time, financial market helps in quickly and effectively transforming assets into money, as well as the flow of all kinds of funds and their further investment. This contributes to the development of financial market, more effective management of business entities, along with faster and more stable development of the economy. In the following text, the types and functions of institutional investors on the financial market will be highlighted, as well as their contribution to the development of the financial markets.

Keywords

• institutional investors
• financial market
• money market
• capital market
• investment funds
• risk diversification
• stocks
• bonds
• standard deviation (risk)
• income/risk compromise