What is a common feature of institutional investors?

Institutional investors are entities that pool large sums of money and invest those funds on behalf of others. This characteristic distinguishes them from retail investors, who typically invest their own personal funds. Institutional investors include organizations like pension funds, insurance companies, endowments, and mutual funds, which are tasked with achieving specific returns for their beneficiaries or clients.

By managing funds for others, institutional investors leverage their expertise and resources to make informed investment decisions, access a wider range of investment opportunities, and negotiate better terms due to their size and influence in the market. This fiduciary responsibility is a key aspect of their role, as they aim to achieve the financial goals of the individuals or entities they represent.

Other options do not accurately reflect the nature of institutional investors. The first option describes individual investors, while the second focuses on personal investment rather than managing funds for others. The last option suggests that institutional investors only seek high-risk investments, which is not true; they often have diversified portfolios that include various levels of risk to align with their investment strategies and client objectives.