The fund’s managers are the professionals who manage the money of their clients or customers in order to reap maximum benefit and minimize loss. Basically, investment management is the professional technique of asset management, which involves assessment, identification, evaluation, and allocation of financial assets to meet defined financial objectives for the advantage of investors as a whole or for a single unit. The goal of the fund’s manager is to provide sufficient funding to the investors that will allow them to function normally and contribute to the economic growth or profit of the country. Thus, the main responsibility of the fund’s manager is to ensure that the money is invested appropriately and returns a profit to the investors.
A lot of people nowadays invest through mutual funds. However, mutual fund managers take care of day-to-day investment operations, while the clients make certain decisions themselves regarding the details of investments. In fact, most investors believe that the jobs of the fund managers and the clients are not necessarily the same.
In the earlier days when the concept of fund management was developed, portfolio managers made the decisions about the investments. They decided how much money should be invested on fixed-return investment instruments and how much should be risked in equities and derivatives. These decisions were often based on assumptions about future market conditions. Fund managers today are responsible for making evaluations about the performance of the portfolio. However, they are able to affect portfolio investments through several different methods.
The method of asset allocation is one of the main tasks of a fund manager. He needs to identify the appropriate mix between stocks, bonds and derivatives in order to provide enough liquidity for his client’s needs. Since all investors have different needs, the manager has to create a portfolio that will satisfy everyone, based on his evaluation of the current status of the economy and financial markets.
Another method that fund managers use to make evaluations is by communicating with their investment managers and their staff. They send reports to the investors on a regular basis, usually once a week. The main purpose of these communications is to let the readers know if there are changes in the strategies or in the structure of the portfolio. It is also important for them to inform the public about the rules that they have established for managing the investments. For instance, they might limit the bonuses that the salesmen and brokerage houses can earn, or they might institute policies for only permitting investments by accredited investors and securities firms.
Communication with the fund manager is therefore important. The best way to do this would be for people in the investing industry to become familiar with the daily operations of a fund manager. Most people would only need to log onto the web-sites of the brokerage houses and the investment firms and follow the progress of the portfolio. This will help them gauge the performance of the manager. A lot depends on the type of portfolio management a company employs. So it is advisable to keep track of what the fund managers are doing and how they are managing their investments!