Fund Management Requires Skills and Qualities
In order to be categorized as a Fund Manager, you must have certain qualifications, such as a Master’s Degree in Accounting, Investments, or a similar field, or an MBA. You must also have several years of experience in investment management to qualify for this position. Fund managers are usually senior financial officers responsible for investing client money for pension or savings plans, as well as individual investor accounts. The role of a fund manager may vary, depending on the size and complexity of the investment plan.
There are different types of funds that fund managers are responsible for managing, including: hedge funds, preferred stocks, option-based funds, and stock funds. Hedge funds manage for client accounts without requiring the client to invest directly in the stocks or securities offered by the fund. Preferred stocks are managed by investing in a series of securities that give the investor the ability to make larger dividends than what the value of each individual security would be. Option-based funds are another type of popularly used fund manager that allows individuals to invest in securities such as currencies, stock indexes, or mutual funds while avoiding any direct involvement in the underlying stocks or securities.
An important role of a manager must be identifying risk factors that may affect the overall performance of the portfolio, as well as selecting investments that fit a client’s personal and investment objectives. They must also determine which investments are right for a specific portfolio. Many fund managers manage one or several investment portfolios, depending on what clients need. For example, a young couple wishing to build a retirement portfolio may opt for a managed fund’s portfolio that allows for growth of their children’s college funds, while a family of four with two working parents may opt for an asset-based portfolio that allows both parents to invest in equities.
Some fund managers are specialists in particular areas, while others possess a wide range of skills to cover a wide spectrum of assets and investment types. Some specialize in the short-term bond market, while others have extensive experience managing the stock market. Fund managers with backgrounds in the financial markets and a broad range of skills are needed to be successful.
In general, fund managers are hired by investors themselves to manage their investments. Some investors choose to retain the services of a professional investment analyst. Investment analysts make recommendations to investors on how to handle their investments based on their investment philosophies. Both fund managers and investment analysts must evaluate various aspects of an investment portfolio in order to provide sound advice to their clients. These professionals often have a background in finance, although they do not need to have extensive degrees in finance to become qualified as a financial manager.
There are many different fields of specialization within the world of fund management, including futures and options trading, bond and commodity markets, mutual funds, and stock markets. Managers who are involved in a specialized area will generally focus on that specific type of asset. The same is true for those who work in finance: those who manage money for corporations need to understand the different ways in which corporate bonds are structured and traded. In addition, some fund managers will serve as investment analysts for a variety of assets. Regardless of their specific area of expertise, most fund managers must possess strong interpersonal skills and be capable of managing a variety of people and complex situations.