What is an Asset management firm?
Asset management companies (AMCs) are corporations that collect money from individual and institutional investors and invest it in a variety of securities. The money is invested in capital assets such as equities, real estate, bonds, and other similar assets. Asset management companies employ specialists known as fund managers to oversee investments, while a research team identifies the appropriate stocks.
Fund managers select investment opportunities that are consistent with the fund's goals. A debt fund, for example, invests primarily in bonds and government securities to secure the investment and achieve a consistent return.
An equity fund primarily invests in company shares to maximize returns for investors. When you invest in an AMC, you are essentially investing in a fund managed by the AMC. The funds' returns are market-linked, meaning they are determined by the fund's performance. A well-managed fund has a better chance of delivering bigger returns.
The fund would levy a tiny fee called a fund management fee in exchange. It is a significant source of revenue for the AMC. To maximize its subscribers and thus revenue, a fund is required to deliver competitive returns in its category.
Also Read | What is Equity Investment?
So, now that we've established what an Asset Management Company is, let's have a look at some of the best AMCs in the United States with whom you can manage your finances. All the data are taken from this source.
Top 10 Asset Management Firms in the US
BlackRock:
AUM: $9.464 trillion
BlackRock is one of the world's largest financial institutions, as well as the world's largest asset manager. In 1988, the company was created, and in 1999, it became public. 2
Through its iShares products, the company has influenced the expansion of exchange-traded funds (ETFs). In 2021, iShares accounted for more than a quarter of BlackRock's assets under management.
As of December 31, 2021, it had $10 trillion in assets under management (AUM). For institutions, intermediaries, foundations, and people all around the world, the organization offers a broad variety of investing, risk management, and consulting services.
BlackRock has worked hard to establish itself as a market leader in terms of environmental, social, and corporate governance issues (ESG). The corporation has been chastised for contributing to climate change, maintaining tight relations with the Federal Reserve System during the COVID-19 pandemic, engaging in anti-competitive activities, and making large investments in China.
BlackRock was founded in 1988 and now has over 85 operations in 38 countries, employing roughly 16,000 employees. The New York Stock Exchange (NYSE) trades BlackRock shares, which have a market capitalization of $130 billion as of January 14, 2022.
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Fidelity Investments:
AUM: $4.23 trillion
Fidelity Investments (formerly Fidelity Management & Research) is a privately held investment company based in Boston, Massachusetts. Edward Crosby Johnson II launched the company in 1946, and it now employs over 41,000 employees.
Fidelity Investments' president and CEO, as well as chairman of Fidelity International, is Abigail Pierrepont Johnson (FIL). The parent firm of multiple Fidelity enterprises is FMR LLC. As of the third quarter of 2021, Fidelity was an asset management and discount broker with over 30 million customers. Individual investors can buy and sell assets using an internet marketplace.
Fidelity also handles clients' entire portfolios on their behalf. It made waves in the summer of 2018 when it began selling mutual funds with no cost ratio and no minimum investment requirement. As of September 30, 2021, it was the world's fourth-largest asset manager, with $4.23 trillion in discretionary assets under management (AUM) and $11.1 trillion in total assets under administration (AUA).
The company operates 200 investor centers around the United States and has 38 million active brokerage accounts. Fidelity has offices in Canada (Toronto, Montreal, Calgary, and Vancouver), Germany, Belgium, Italy, France, Spain, Switzerland, Ireland, and the United Kingdom, and provides investment services to about 14,000 financial advising firms and brokers.
The Vanguard Group:
AUM: $8.4 trillion
Vanguard is well-known for its passive investing method. This means that money is invested in mutual funds that are designed to track the performance of a specific index or the stock market as a whole. The Vanguard Group Inc, based in Malvern, Pennsylvania, is the world's second-largest asset manager, with $8.2 trillion in global assets under administration as of December 1, 2021. Low-cost mutual funds, exchange-traded funds (ETFs), brokerage and trust services, asset and wealth management, variable and fixed annuities, financial planning, and educational account services are all offered by the organization, which employs over 17,500 people in 19 locations across the world. John Bogle founded Vanguard in 1975, and it now has over 30 million investors in over 160 countries.
The majority of Vanguard's ETFs have modest expense ratios. Vanguard also provides brokerage, financial planning, annuities, and other services in addition to asset management.
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State Street Global Advisors:
AUM: $3.86 trillion
Boston-based State Street is a State Street Corporation subsidiary. It invests in a variety of institutional clients, including non-profits, local governments, associations, and even educational institutions.
Endowments and foundations, governments and countries, consultants, employers, CFOs, corporate treasurers, financial advisors, and other intermediaries receive portfolio management and advisory services from State Street Global Advisors Inc (SSGA), the asset management arm of State Street Corporation. SSGA was founded in 1978 and now employs over 2,500 individuals while serving over 2,300 global institutional clients.
The first US-listed and still-largest ETF was created by the business in 1993. In 1999-2002, it also launched the first ETFs in Hong Kong, Singapore, and Australia. SSGA now controls and owns more than 140 exchange-traded funds. As of September 30, 2021, State Street Global Advisors was the world's fifth-largest asset manager, with a total AUM of $3.9 trillion.
Morgan Stanley:
AUM: $3.274 trillion
Morgan Stanley was founded on Wall Street in 1935 by partners and employees from J.P. Morgan and Drexel. Harold Stanley and Henry Morgan founded the business in 1935.
Morgan Stanley (NYSE: MS) is a worldwide investment bank and financial services corporation based in New York with over 70,000 employees and operations in more than 40 countries. Financial institutions, enterprises, governments, small and medium-sized businesses, individual investors, and high to ultra-high net worth clientele all benefit from its goods and services.
Institutional Securities, Wealth Management, and Investment Management are the company's three main segments. The company had total assets of $1.1 trillion, deposits of $311 billion, net loans of $151 billion, and total equity of $103 billion at the end of the fiscal year 2020. As of June 2021, Morgan Stanley Investment Management Inc (MSIM) had $1.5 trillion in assets under management (AUM).
Morgan Stanley's stock trades under the ticker code MS on the New York Stock Exchange, with a market capitalization of $189 billion as of September 10, 2021.
Capital Group
AUM: $2.6 trillion
Los Angeles-based Capital Group was founded in 1931. As of February 2022, it employed approximately 7,800 workers in 29 offices throughout the world. Capital Group Companies Inc is one of the world's largest and oldest investment management organizations, with headquarters in Los Angeles, California.
The Group is a privately held corporation that specializes in active investment and offers a variety of products. Through its American Funds Distributors subsidiary, it offers over 40 mutual funds. Separately managed accounts, private equity, and high net worth investing services are also available. Capital Group had $2.6 trillion in total assets under management as of June 30, 2021. (AUM).
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Goldman Sachs
AUM: $2.372 trillion
Goldman Sachs provides a variety of services, including asset management. It caters to a variety of clients, including:
1. Hedge funds
2. Banks and brokerages
3. Pensions
4. Endowments and foundations
5. Corporations
6. Governments
Goldman Sachs unveiled a 10-year, $750 billion climate transition and inclusive growth strategy in December 2020. The Goldman Sachs Group Inc, headquartered in New York, is one of the world's largest investment banks, with over $2.1 trillion in assets under supervision.
Corporations, financial institutions, governments, hedge funds, pensions, endowments, foundations, and high-net-worth individuals benefit from the firm's investing, trading, asset management, and securities services, which are provided in more than 30 countries (HNWI).
Investment Banking, Institutional Client Services, Investing and Lending and Consumer & Investment Management are the Group's primary business segments. The company's primary banking subsidiary in the United States is GS Bank USA. Goldman Sachs' ordinary shares are listed on the New York Stock Exchange (NYSE) and trade under the ticker code GS, with a market valuation of $142 billion as of September 10, 2021.
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JPMorgan Chase
AUM: $2.996 trillion
JPMorgan Chase is best known as an investment bank, but it also boasts a thriving asset management division. As part of a new custody arrangement, it received $1.3 trillion in assets from BlackRock in 2017.
JPMorgan Chase & Co. (NYSE: JPM) is a global investment bank and financial services firm with roots dating back to 1799. Its clients include corporations, retail customers, wealthy individuals, governments, institutional investors, banks, broker-dealers, hedge funds, alternative investors, insurance companies, and government-sponsored enterprises.
By assets, deposits, market capitalization, and the number of branches and ATMs, it is the largest banking institution in the United States. It is also the world's largest bank by market value and the world's sixth-largest bank by assets. Corporate, investment, and consumer banking, small business and community banking, asset management, treasury and securities services, mobile and online banking, card services, foreign exchange, and other services are provided by the corporation.
It is the largest credit card issuer in the United States, with sales of over $1.2 trillion in credit and debit cards. JPMorgan Chase has $3.7 trillion in total assets, $1.04 trillion in total loans, $2.3 trillion in total deposits, and $286 billion in stockholders' equity as of June 30, 2021. The company's stock is traded on the New York Stock Exchange (NYSE) under the ticker code "JPM," and its market capitalization as of September 10, 2021, was $470 billion. JPMorgan Chase is based in New York City and employs around 260,000 employees.
Bank of New York Mellon:
AUM: $2.2 trillion Dollar
BNY Mellon Corporation (BNY Mellon) is an international investment firm that offers a wide range of goods and services to corporations, financial institutions, individual investors, and high-net-worth individuals. It employs approximately 48,000 full-time personnel in over 34 countries and manages more than $2.2 trillion in assets under management (AUM), $41 trillion in assets under custody/administration, and $286 billion in private wealth assets.
BNY Mellon's common stock is traded on the New York Stock Exchange (NYSE), and its market capitalization as of December 1, 2021, was $45 billion. The corporation was founded in 1784 and is one of the oldest banking institutions in the United States.
Prudential Financial Inc:
AUM: 1.72 trillion
Prudential Financial Inc is a financial services firm based in the United States that offers a variety of insurance and investment products. It provides term and universal life insurance, health insurance, variable and fixed annuities, pension and retirement-related services, mutual funds, asset management, securities brokerage, and other services with approximately 41,000 brilliant workers.
Prudential is the largest life insurance business in the United States in terms of total admitted assets and the second-largest in terms of net premiums issued. Mexico, Chile, Brazil, Argentina, Australia, Germany, France, Italy, Luxembourg, the United Kingdom, Japan, Taiwan, South Korea, China, Indonesia, Malaysia, Ghana, Singapore, and Hong Kong are among the company's foreign operations. Prudential Financial had more than $4 trillion in gross life insurance in force as of September 2021.
The common shares are traded on the New York Stock Exchange (NYSE) under the ticker symbol PRU, and its market capitalization as of November 10, 2021, was $41 billion.
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Bottom Line
Asset management is critical for high-net-worth individuals who wish to develop their assets over time while meeting all of their goals and minimizing risks. Affluent folks, on the other hand, require the greatest resource management organizations and experts to guide them through all of this.
While there are many asset management businesses to choose from, only the best asset management firms for you will actually assist you in meeting your financial objectives.
The problem with most huge financial organizations is that they are more concerned with their own bottom line and how they might benefit their shareholders than with your money and assets. As a result, any solution they recommend for you is unlikely to be the best.
They may just ask you a few basic questions, such as your risk tolerance and the number of assets you wish to collect, and then offer you a predetermined investment plan. In truth, whether it's resource management or another financial service, it must always be linked to your long-term goals and desired lifestyle.
