Home Financial & Banking Terms Who is a Fund Manager?

Who is a Fund Manager?

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Fund Manager

A Fund Manager is a professional who makes decisions to purchase or sell financial instruments on behalf of investors. These decisions are made with the objective of maximizing returns to the investors but in congruence with the stated goals of the fund to which the investors have contributed.

Background

Generally, the Fund Manager would be a finance professional; a MBA or Chartered Accountant or Chartered Financial Analyst, etc. He may manage an insurance fund, a hedge fund, a trust fund, a pension fund or a mutual fund.

Investment Mechanism

The investing public has neither the time nor the expertise to effectively and efficiently manage their financial resources.  The Fund Manager makes decisions after monitoring the financial markets, assessing current economic trends, and analyzing company performances and future prospects. The data is supplied to him by a team of analysts.

Responsibilities

A major responsibility of the Fund Manager is to ensure that the fund is managed in accordance with the prescriptions of regulatory authorities. He must also deliver growth in terms of capital appreciation and returns in the form of dividend payouts which are the expectations of the investors.

Fee

A percentage of the Assets Under Management (AUM) is paid to the Fund Manager as his fee. The fee is at the discretion of the Asset Management Company (AMC) but subject to guidelines issued by SEBI

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Randolph Rowe is a professional banker and former General Manager of Small Industries Development Bank of India (SIDBI). He brings with him the wealth of 34 years of all-round experience in the banking sector - comprising 12 years with IDBI and 22 years with SIDBI - which he combines with his flair for writing.

3 COMMENTS

  1. I’m more passionate about finance and I used to hunt the articles related to investment and fund managements. This article about Fund manager is very informative, I read the article I gone through and understood about the things like investment mechanism, responsibilities and fee about fund management. In one case I was not clear about the fee, It would be better if is explained with example so that a common people can understand. Thank you!

    • The limitation on fees and expenses is prescribed in Regulation 52 of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996. The ceiling rate is 2.50% of the daily net assets of the scheme. The fees are calculated on a sliding scale. The type of fund and the value of daily net assets determine the recurring expenses that could be charged to the scheme. Investment and advisory fees are a part of these recurring expenses

  2. An MBA or Chartered Accountant or Chartered Financial Analyst, any of them could be your funds manager with responsibilities that are required on your part as an investor.The profile of a fund manger could have certain highlights as their working mechanism and their desired background as general public doesn’t want to get engrossed in such hectic work as investments.

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