What Is a Fund Manager?
What are Fund Managers? These are the professionals who manage the investments of investors such as institutional investors, self-directed individual assets, families, groups and the government. Investment management is the discipline of asset management, which involves the selection of suitable securities, such as common stock, bonds, equities, and derivatives, for the benefit of all investors. They assess risks and opportunities, and make recommendations to investors on how to obtain the maximum return for their investment. The duties of a manager may vary according to the different types of funds and portfolios he manages. He may be involved in decision-making and monitoring of funds, or be solely responsible for buying, selling, trading, or custody of securities.
Why are Fund Managers needed? The role of a fund manager is absolutely necessary, especially for long-term investors. This is because the managers are primarily responsible for making sure that the investment portfolio remains profitable for as long as possible, with little or no changes needed by investors themselves. Also, since many investors use funds to diversify their portfolios, having a reliable and experienced fund manager is an absolute must. In the event of a market decline, fund managers are often the ones who step in to provide investors with backup.
Are there different types of Fund Managers? There are various types of fund managers available, each specializing in different areas such as: price action analysis, option pricing, sector allocation, commodity and bond markets, exchange rates, finite difference analysis, and principal re-balancing. Each of these areas has different needs, techniques, and tools, and are best employed by individuals who have a thorough understanding of the products and services offered.
What can an investor do if I need help choosing the right Fund Manager? Active fund managers are among the most common types of Fund Managers. The services of active fund managers are primarily geared toward providing financial guidance and investment management to individual investors and institutional clients. While most actively managed mutual funds are managed on the behalf of the investors themselves, some actively managed mutual funds are managed by independent fund managers.
How are mutual funds categorized? Fund categories include equity funds, bond funds, money market funds, basket funds, and real estate funds. Some other categories include emerging market funds, real asset funds, commodities funds, and specialty real assets funds.
Who are the key players and how do they play an important role in my investment strategy? Fund managers typically fall into two categories: traders and consultants. Traders work in close collaboration with investors, helping them find investments that fit their investment style and achieving results that match the investor’s objectives. Consultants handle the day-to-day management of the funds, helping investors achieve their investment style objectives and evaluating any market data that may impact the investments. Both traders and consultants offer valuable services to their clients, and both play an important role in my investment strategy.