Which financial instrument is commonly used in asset management?

In asset management, stocks and mutual funds are commonly used financial instruments because they provide investors with a diversified way to invest in the market. Stocks represent ownership in individual companies, which can offer capital appreciation and dividends, making them an essential part of many investment portfolios. Mutual funds pool money from multiple investors to invest in a diversified set of stocks, bonds, or other securities, which can reduce risk and improve return potential. This structure allows asset managers to provide professional management and access to a variety of investment opportunities for their clients.

While futures contracts, real estate properties, and commodities can also be part of an asset management strategy, they typically serve different purposes or appeal to different types of investors. Futures contracts are largely associated with hedging and speculation rather than long-term investment growth. Real estate can be an investment asset but is not as commonly included in the actively managed portfolios compared to stocks and mutual funds, which offer liquidity and easier management. Commodities may provide inflation protection and diversification but are not as central to traditional asset management as stocks and mutual funds.