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What is AMC?

An asset management company (AMC) is a firm that invests pooled funds from clients, putting the
capital to work different investments including stocks, bonds, real estate, master limited partnerships,
and more.

Along with high-net-worth individual portfolios, AMCs manage hedge funds and pension plans, and—to
better serve smaller investors—create pooled structures such as mutual funds, index funds, or exchange-
traded funds, which they can manage in a single centralized portfolio.

How Do AMCs Work?


Because they have a larger pool of resources than the individual investor could access on his own, asset
management companies provide investors with more diversification and investing options. Buying for so
many clients allows AMCs to practice economies of scale, often getting a price discount on their
purchases. Pooling assets and paying out proportional returns also allow investors to avoid the minimum
investment requirements often required when purchasing securities on their own, as well as the ability
to invest in a larger amount of securities with a smaller amount of funds.

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