Now that the income tax return filing is done for the fiscal year, its time to figure out your investment goals for the new year ahead. One major investment avenue with attractive returns is mutual funds. However, before opting for mutual funds, one crucial deciding factor in the process is a fund manager.
Who Is A Fund Manager?
A fund manager is a professional with experience in the finance sector and is responsible for putting in place investment strategies and managing the fund. The fund management can be done by a single person or a team of people.
These managers receive a fee for their services, which is calculated as a percentage of the average Assets Under Management (AUM). A good fund manager helps investors use their funds efficiently and gives peace of mind to the individuals that their money is in safe hands.
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Responsibilites Of Fund Managers
To understand the efficiency of a fund manager, it is important to comprehend the roles they play in managing the funds. Let's see what responsibilites these managers play in managing these AUMs.
Building The Portfolio
Fund managers are responsible to build the portfolio and manage the investments held by the mutual fund. They decide on which stocks, bonds, and other securities to pick from and invest in them in a certain mix to capitalise best on the investment.
Risk Management
The managers have the onus to maintain a balance in risk and return to keep the stability of the fund and safeguard the investors’ interests. They are responsible for actively evaluating and overseeing the risks and performance of the various investments in the funds. Accordingly, they make changes in the investment ratios to help the investors capitalise on their money in the best possible way.
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Compliance
A major responsibility of the fund managers is to ensure that the fund is operating in tandem with the regulations decided by the market authorities. Any violation of these norms can result in punishments such as penalties or worse. Therefore, the manager keeps a strict tab on the functioning of the fund to ensure that they remain in compliance with the regulations.
Therefore, always analyse the fund manager and their performance in these indicators before opting for a mutual fund. Your money should go in safe hands and ensuring that is your responsibility.