Are you interested to know more about investment banking mutual funds? Well, do you know that both things are actually very different? If you did not know, well, it is good that you have visited this article! This article will show you all of the differences you can find between investment banking and mutual funds. Are you eager to figure out the differences?
- Their main focus
The first aspect which signifies the difference between investment banking and mutual funds would be their main focus in gaining profit. When you meet an investment banker and ask about his/her focus to gain profit, it is certain that the banker would answer that he/she focuses on selling the investors the business he/she is involved. The bankers would have clients whose are private companies and other types of corporations. A private firm will generate assistance from the investment bank when it wants to work an acquisition deal or mergers, or when it wants to turn public. Investment banks gain profit when bonds and stocks are issued, takeovers or mergers happen, and when there is a dynamic trend in the secondary market.
On the contrary, mutual funds’ focus lies at buying ends since their way to raise funds is to attract the investor to work with them. Supporting investors or purchasing business interests are also possible, by the way. They are also directly involved in the decisions made by the management. Besides, they also involve more predictions.
- Their type of analysis
Now, let us learn more about investment banking mutual funds, shall we? You can also find another difference between investment banking and mutual funds when you are seeing the types of analysis each of the investments uses, and they are pretty different. Investment banking would be working on the field which is more abstract and vague compared to the mutual funds, but it will also be more prudent as well. The cross-market arbitrage, event arbitrage, and high-frequency arbitrage are several examples of the trading strategies used when you are involved in investment banking.
The analyses made by the people who are involved in mutual funds, on the other hand, are typically deeper and more critical compared to investment banking. Making decisions in mutual funds need to involve a solid intellectual framework, but you need to make sure that you keep your emotions at bay when doing so. Well, those are what you need to know about investment banking mutual funds!