This chapter stands apart from the others in this book, in the sense that it is not directly concerned with how to value particular securities or with how to value an investment portfolio. It is concerned instead with a group of principal actors on the Stock Exchange investment stage, that is, with those financial institutions which are the major investors in Stock Exchange securities. No book on investment can ignore these institutions — pension funds, insurance companies, investment trusts and unit trusts — firstly, because they are the intermediaries through which the vast majority of people knowingly or unknowingly invest in stock market securities and, secondly, because their presence is now so major that every facet of investment, from performance measurement to the role of stockbrokers and jobbers, is affected by their existence.
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