Investing in the markets can get overwhelming. It’s a full-time job. You have to constantly track the markets and your investments and be updated about all the happenings around the world. Not everyone has time, skills, and resources to manage their investments full-time. This is when mutual funds come into action. As mutual fund investments are professionally managed by a fund manager, these investment options could be ideal for someone who is new to investing or doesn’t have the resources or skill set to invest in the markets. A fund manager is often overlooked by most investors. However, they are the driving factors as they are the ones who will compare mutual funds and decide the right mutual fund investment for your portfolio. This article aims to emphasize on why and how a fund manager is important for your investment portfolio.
Who is a fund manager?
A fund manager could consist of up to three or more people whose primary job is to overlook the mutual fund investments. They are mutual fund experts who are endowed with extensive knowledge and skill sets to understand the functioning of the stock markets.
A fund manager aims to regularly manage and review an investor’s investment portfolio by collecting information about global economies and different companies. They do this with an attempt to successfully predict the prices and accordingly decide if they should buy, hold, or sell the investments. What’s more, they also help an investor in drafting a financial plan and coming up with the right investment strategies for their portfolio. In essence, a fund manager makes investment decision on behalf of the investor. Thus, a fund manager can play a significant role in determining the success of your mutual fund investments.
Role and responsibilities of a fund manager
Following are some of the roles and responsibilities that a fund manager is expected to follow through:
- Picking the right stocks for a portfolio
The fund manager is the decision maker as to which stocks, bonds, assets should an individual invest in. They are usually assisted by a talented team of research staff, analysts, and traders, who help the fund manager in making right investment decisions. - Managing and adopting right asset allocation strategies
A fund manager is also responsible for drafting the right asset allocation strategies and deciding the amount of assets to be held in each category. - Meeting all reporting standards
The fund manger is accountable for emerging an investment portfolio that meets the mandatory reporting requirements. It’s also crucial that the fund manager makes the investors aware about the rules and ensure that they also follow them. They must also ensure that the operations of the mutual fund schemesare in compliance with the rules laid down by the mutual funds’ regulator in India – SEBI (Securities and Exchange Board of India). - Ensure growth and returns on mutual fund investments
This is probably one of the biggest responsibilities and duties of a fund manager. A fund manager is often judged on their capabilities of producing inflation-beating returns.
A highly skilled fund manager is successful in increasing an investor’s confidence in the company, apart from delivering significant returns from mutual fund investments. So, choose the right fund manager for your mutual fund investments as they can significantly hamper you returns. Happy investing!
