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Portfolio Management vs Investment Management

Blog Date
January 20,
2025

Often used interchangeably, portfolio and investment management are not quite the same. Simply put, portfolio management is a more specific part of investment management. Since the two areas are rather different, it is important to understand the exact differences between portfolio vs investment management. This would also help you make an informed choice for your future career trajectory as to which of the two would be more suitable to pursue in the long run. 

What is Portfolio Management?  

When drawing a distinction between portfolio vs investment management, it is important to understand each of them in detail. Let us begin with learning more about portfolio management.

It simply refers to the process of managing the investments of an individual or an organization on their behalf. Portfolio Managers are skilled professionals involved in the task of choosing and managing a group of investments. The objective is to help meet the long-term financial goals of the client.

What is Investment Management?  

To better understand the portfolio vs investment management comparison, let us take a quick look at what investment management means. It refers to the process of managing a group of financial assets in possession of the client (individual or organization), also called an investment portfolio. Investment management involves designing strategies for investment in the short- and long-term, buying and selling assets, managing their allocation, and creating tax strategies. 

Key differences in portfolio and investment management  

Now that we defined the two terms individually, let us highlight the specific differences in portfolio and investment management for better understanding.

Parameters Portfolio managementInvestment management
Scope The focus is on the allocation and management of a specific portfolio of financial assets to help meet the client’s financial goals. These include bonds, stocks, and real estate.Covers all aspects of investment, such as choosing assets, researching, and overseeing them. Unlike just asset allocation and management, a wider array of activities are covered – valuation, market analysis, and strategic decision-making for different investment channels.
Objective Build and maintain a diversified portfolio aligning with the risk-return choices made by the investorsMaximize returns on investment for the client along with risk management 
Approach Choosing assets, allocating them, and overseeing their regular performance to ensure that they align with the client’s objectives and changing market trendsDesigning strategies for investment, conducting detailed research and analysis of financial assets, building investment portfolios, and overseeing their performance taking into account external market conditions
Client requirements Suited for both individual and organizational investors, helping them balance risks and returns  More suited for organizational investors, large funds, and entities that need asset management across varied regions and sectors

Benefits of Portfolio Management

The table above highlights some of the key differences in portfolio and investment management. Let us also look at the individual advantages that each of these strategies offers to further understand how they differ from each other.

Some of the top benefits of portfolio management are as follows:

  • Improved decision-making: Since portfolio managers have access to a single source of portfolio for a collection of investments, they can use the researched insights and data to make more informed decisions. Access to the right data and tools, metrics, and real-time analytics enables portfolio managers to make improved decisions for the overall benefit of their clients.
  • Higher Return on Investment: Among the many differences in portfolio management vs investment strategies is that in the case of the former, investors are offered a structured framework that enables them to choose the best assets that offer the maximum returns. Portfolio Managers help their clients gain higher returns on their investments even if the funds available are limited.
  • Lower risks: Portfolio managers always prioritize active risk management and this is also one of the distinguishing factors in portfolio management vs investment strategies. They assess the risks involved and make efforts to balance the risk with the potential returns, eventually bringing risks to a minimum and maximizing returns.

Benefits of Investment Management

Let us now look at the specific benefits that investment management offers to individual and institutional investors:

  • Tax benefit: Investment managers are efficient at devising tax strategies that help reduce tax liability on clients. They also make efforts to increase after-tax returns for their clients.
  • Customized strategies: This is one of the major differences in portfolio management vs investment strategies. The latter work with their clients to understand their specific requirements and customize strategies to help clients achieve their financial objectives. For instance, investment managers may suggest clients invest in mutual funds or Systematic Investment Plans (SIPs) as per their needs.
  • Maximum savings: Investment management enables clients to increase their overall savings by helping them invest in tax-saving investment channels. These include ULIPs, life insurance plans, and PPF. These investments facilitate deductions from the taxable income of clients. 

Career in Portfolio Management

As part of the comparative study on portfolio investment, let us take a look at the top career opportunities in this domain. The career path in this field may seem as follows:

Job roleJob descriptionAverage annual salary (approx)
Portfolio ManagerHandle smaller portfolios and oversee senior analysts INR 18,80,000 per annum
Senior Portfolio ManagerResponsible for handling several high-value portfolios, identifying and recommending clients on the best available investment opportunities, managing the team of analysts, and leading projectsINR 12 lakh per annum
Senior AnalystOversee the work of other junior analysts, specializing in a specific type of investment or security INR 10 lakh per annum
Junior AnalystThey collect and analyze data, undertake financial modeling activities, and other analytical tasks to help managers make informed decisionsINR 5.6 lakh per annum

Career in Investment Management

Continuing with the comparative study in portfolio investment management and investment management, let us now take a quick look at the career options offered in investment management.

Job roleJob descriptionAverage annual salary (approx)
Investment AnalystResearch and evaluate financial assets like bonds, stocks, currencies, and commodities to help clients identify the best investment strategiesINR 11.4 lakh per annum
Junior Investment AnalystOversee financial news using specialist media sourcesINR 11.2 lakh per annum
Investment ManagerOversee all activities concerning financial investments, planning, and portfolio management for clientsINR 8.3 lakh per annum
Junior Investment Manager Lead the process of new investments, screen, and assess potential opportunities for investmentINR 5.4 lakh per annum

Conclusion

Investment or portfolio management choice is entirely based on individual choice, interests, and career aspirations. This article detailed the various comparative factors between portfolio and investment management. Which of the two you choose to pursue as a career can be based on several factors. 

Take the first step to build specialized knowledge in both domains with a professional degree program. Sikkim Manipal University offers online MCom to students on the Online Manipal platform. The course unlocks career opportunities in investment management and many other potentially rewarding roles upon graduation.  

Sikkim Manipal University is accredited A+ by NAAC and all its online degree courses are entitled by the UGC. This means that the online MCom degree obtained from Sikkim Manipal holds equal relevance and validation as one secured conventionally at an offline campus. 

Disclaimer

Information related to companies and external organizations is based on secondary research or the opinion of individual authors and must not be interpreted as the official information shared by the concerned organization.


Additionally, information like fee, eligibility, scholarships, finance options etc. on offerings and programs listed on Online Manipal may change as per the discretion of respective universities so please refer to the respective program page for latest information. Any information provided in blogs is not binding and cannot be taken as final.

  • TAGS
  • investment management
  • online degree
  • portfolio management

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