Fund managers are the people in charge of the money entrusted to them by investors. An investor who looks for a manager has two goals in mind: a good return on his investment and a good manager. Of course, he also wants the best of both these worlds. Fund managers should be experienced professionals with excellent managerial skills. Otherwise, investors will be left to fend for themselves when the returns do not live up to their expectations.
Fund managers are in charge of the investments of the fund, which is an account that pools money from many investors. Managing this fund involves looking after its interest rate, asset allocation, risks and making sure that the investors are happy with the way things are going. For the manager to do well in this position, he must have a good understanding of the fund and the market it is involved in. The manager also has to have a good idea of what his clients want. He should therefore not only be able to assess risk factors and opportunities, but also be able to create plans as per the clients’ needs.
Managers can either work independently or be employed by investment firms. Most firms find it more advantageous to employ a fund manager instead of letting him manage their own funds. For companies, however, it is much easier to hire a fund manager personally as opposed to using an outside agency. This also ensures that the company’s fund manager has a close personal connection with the investors and thus is better able to provide helpful advice.
The manager has the task of buying and selling securities as per the needs of the clients. In this he has to make informed decisions concerning the buying and selling of stocks and funds. If the investors are not happy with the buying and selling activities, then he must take steps to alter these. In fact, the investor may even block his orders until the mood changes. Fund managers have to be very careful as they are dealing with potentially volatile investments where a wrong move could mean a loss to the whole enterprise.
While managing funds, the fund manager must have an excellent understanding of his market. He should be able to forecast the movement in the market in terms of the stock price and he should be able to make buying and selling decisions quickly. In addition, he should possess an ability to analyze data and trends and make good analyses of them. This ability will make him a better decision maker and therefore help him to understand the needs of the investors. Fund managers should also be able to understand the different risks involved and have good mathematical and statistical skills.
Fund managers generally earn profits from the returns of the invested money. However, they have to bear other expenses besides the usual salary of salary and incentives. They need to buy equipment like computers and software, rent office spaces for their staffs, buy stocks and commodities, pay employees and incur other costs associated with running a fund. Thus, the main aim of the fund manager is to earn a profit while still ensuring that the fund manager maximizes the return on his investment. A very good fund manager is one who earns a five-year average income from his fund.