And this very vision of the essence of the institutional investor, in our opinion,
accumulates the content of the given institute and as a participant in the financial
market, and as a financial institution.
In addition, in our opinion, the emphasis is on the obligatory clarification that an
institutional investor is a legal entity that is positioned by the Law of Ukraine “On
Securities and the Stock Market”.
As for the statement made by T.V. Mayorova [5], A.A. Peresada [6], that
institutional investors are portfolio investors, then we will note the following. Based
on the ranking of investors that is found in the economic literature, according to a
classification criterion, as a strategy of activity (or the purpose of investment activity),
all investors are divided into strategic, portfolio and speculators. Portfolio investor is a
person who performs portfolio investments, which is a diversification of investment of
investor's capital into various investment objects and, above all, in various financial
instruments. It is portfolio investment that is the best alternative of all possible options
for investing temporarily free funds in the domestic financial market. The advantages
of the portfolio investment are the following [7]:
-
improve investment conditions by providing a set of securities of such
investment properties that are inaccessible to individual securities and achievable only
in combination (for example, diversification of risk);
-
evaluate, plan, control the results of all investment activity in different
segments of the stock market;
-
choose a portfolio for solving specific investment tasks.
Thus, a portfolio investor is characterized as a subject of investment activity that
invests its capital in various investment objects (instruments) exclusively for the
purpose of obtaining investment income. And therefore, it can be argued that this
feature does not reflect the peculiarity inherent in the investment investor, since
corporate investors can formulate an investment portfolio other than institutional
investors. We also note that among the explored interpretations of the notion of
“institutional investor” there is no unity as well as how functionally results from the
activity of this type of investors.
So, a group of researchers [8; 9; 10; 11] focuses on institutional investors only on
investing (placing) their own (attracted) funds in various financial instruments. The
development of this position is observed in another group of scholars [5; 6; 12] that
emphasize not only the investment activity by the institutional investors, but also the
formation of their portfolios of securities and their subsequent management.
However, in our opinion, the definition of the essence of the institutional investors
should necessarily include the initial stage of investment activity, namely, the
accumulation of savings (funds) of individual and corporate investors for their further
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