Types of Fund Managers
Fund managers are financial professionals who provide investment advice and management services for funds and other asset classes. The term “fund manager” refers to any financial expert that provides fund management services. Investment management is the discipline of asset allocation for the purpose of meeting financial objectives. There are a number of types of these types of managers including centralized fund management, single-stage investment management, mutual fund management, or bottom-up investment management. Managers provide advice and direction for various assets on behalf of investors, with an objective of maximizing returns.
Mutual fund managers are experienced and knowledgeable investors with years of experience in the stock market. They are typically employed by professional investment firms to pick which stocks and other investments will perform best. They often hold joint venture partnerships with other professional investors and have access to other funds as well as hot assets. With many mutual funds, diversification is important as the manager attempts to avoid a concentration of risk within a single fund. As such, they are also able to offer more aggressive returns.
Single-stage invest helps individual investors by providing growth advice and putting them in the right investment environments. These are funds that usually only invest in a select number of companies or industries. In most cases, this type of fund manager has a strong background in finance. One drawback of investing in a single-stage invest is that the gains can be less than what a more aggressive investor would see. Fund managers who specialize in small-cap stocks tend to be more conservative in their investing techniques, thus favoring the slow growth approach over more aggressive investing.
Managed Portfolio Trading (MST) is an aggressive style of investing that seeks greater gains than a traditional portfolio could provide. Fund managers who use MST are expected to increase portfolio gains more quickly than other fund managers. They make their money by selling short positions in investments once they reach higher prices. This allows them to buy low and sell high, making a profit once the price goes up. Managers who use MST have a proven track record of success with a wide variety of assets.
The last category is Value Investing. This style of fund management focuses on stocks that don’t follow the conventional style of distribution. The strategy uses managers who primarily buy stocks in sectors that are considered to be overvalued. These stocks are typically sold at discounts to the market value, allowing investors to buy into them at a significant discount. As such, the returns can be quite impressive, but the returns tend to be much slower than those for more aggressive portfolio managers.
These are just some of the different types of portfolio management offered by experienced fund managers. However, these are not all of the types of services that an experienced consultant can provide. Analysts are generally industry-specific, working with a wide range of different industries. Therefore, it is best to choose an analyst who has the expertise to help you manage your own funds, whether you’re just beginning to get started or have been managing your own funds for many years.