An institutional investor is a large investor such as an insurance company, a pension fund, a mutual fund, or a major investment firm. Institutional investors often trade large blocks of stocks or even whole sectors. They are professionally managed.
Institutional investors often find it impractical to invest in small cap stocks. Small caps can be too small to trade in the quantities needed to be of significance to an institutional account. That is one reason they might invest in a sector rather than in a individual stock. Large caps, real estate, and commodities fit better with their goals.
Related Fool Articles
- [link link title]
Recent Mentions on Fool.com
- Elizabeth Warren Is Right About Citigroup for the Wrong Reasons
- The Most Anticipated IPO's for 2015
- Twitter Inc.'s Conundrum: Increase Revenue or Users?
- 3 Reasons Rite Aid Corporation's Stock Could Soar in 2015
- Retirement Planning: Don't Give In to Pessimism
- 3 Large Cap Biotech Stocks That Could Surprise Investors in 2015