If you agree with the general consensus that the economy will continue to improve for the next few years (as long as Washington gets its act together), then companies that deal with investments are worth a look for your portfolio.

There are several factors that make investment management companies a great bet on an improving economy and why they should benefit in the coming years.

The best investment management companies
One of the largest investment management companies in the U.S. is BlackRock (BLK 1.41%), which has $3.2 trillion under management. The company has a nice, diverse mix of assets, with equities making up just over half of the total, fixed income equaling 31%, cash making up 7%, and alternative and multi-class investments comprising the rest. BlackRock has seen its assets (and revenues) grow by about 8% year over year as a result of the improving economy and the increasing appetite for risk that comes with it.

Franklin Resources (BEN 0.17%) is another good candidate, serving primarily institutional and high-net-worth individuals. The company is quite a bit smaller than BlackRock, with $815 billion under management, and offers a slightly different mix of assets. The company has just 38% of its assets under management in equities, 45% in fixed-income, 16% in multi-class, and just 1% in money market and cash funds. This could mean that Franklin has more to gain from a potential shift to equities over the next several years.

State Street (STT 0.97%) is a worldwide company with about $2 trillion in assets under management, and it focuses mainly on institutional investors. State Street's primary customers are financial businesses like mutual funds, retirement plans, and insurance companies.

The company's investment servicing and investment management businesses combine for just over three-quarters of State Street's revenue, while the rest (23%) comes from interest revenue from the company's own investment portfolio. State Street offers the second largest line of ETFs in the market, making it a definite beneficiary when investors who don't like to pick single stocks (like retirement plans and pension funds) shift their money into equities.

How economic growth benefits these companies
The main reason investment management companies benefit in improving economies is that investors tend to develop more of an appetite for high-risk investments such as equities, as opposed to cash or fixed-income investments. This creates more money for these companies in the form of commissions as investors shift money from one type of investment to another. 

The total assets under management of these companies tend to increase as well, as markets generally do well during these times, and the equity holdings of clients tend to improve. For instance, if a company has $1 trillion of equity assets under management, and the market rises by 10%, the company now has $1.1 trillion in equity assets, which will mean more commissions and interest income for the firm over the long run.

Speaking of interest, this is another benefit to these companies in good economic times. As economies improve, long-term interest rates tend to rise, and so does the spread between the short-term interest rates they pay depositors on cash/money market positions and the long-term rates they can earn by lending the money to other clients.

So, which to choose?
These are all good candidates, and they offer relatively similar products and services, so it's hard to say one is better than another. The bottom line is that if you believe the economic recovery and expansion is real and sustainable, then any of these would make a fine addition to your portfolio.