Institutional investing is a process where non-bank organisation or individual investors pool together their capital and invest in huge amount. They trade as a single large investor and may get incentivized with benefits like lower commissions.
Institutional investors contributes for nearly half of the volume of trading transactions on New York Stock Exchange. Most institutional investors include pension companies, mutual funds, hedge funds, investment banks and insurance companies. Mostly these companies invest other people’s money on their behalf. Pension funds and investment companies are the largest institutional investment entities.
The investor of this method are considered to be more informed, planned, efficient and profit bound due to their extreme professional nature and access to data from different companies and authorities. Sometime retail investors can just watch their steps and blindly follow them, assuming they are mostly group of experts people making well informed decisions.
