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Mutual Fund Manager

 
A fund manager is one of the key per sons in the asset management industry. He is often the face of the fund house. Investors are keen to know this person, to whom they entrust their money

1. Who is a fund manager?

Fund manager is a person responsible for investing money in a mutual fund scheme. He is responsible to attain re turns consistent with the level of risk for the particular scheme. The fund manager is responsible for implementing a consistent investment strategy that reflects the goals and objectives of the fund. The fund manager monitors market and economic trends and tracks securities in order to make informed investment decisions.

For investors looking at adding mutual funds to their portfolios, a fund manager is one of the factors they consider when deciding the fund to select. It is the fund manager who will ultimately guide the investment of the underlying portfolio. By functioning as the stock picker, he is responsible for making sure the portfolio is ahead of its bench mark and peers.

2. What are the responsibilities of a fund manager?

The fund manager picks stocks, focusing on quantitative pa rameters such as price-to-earnings ratios, sales, earnings, dividends, among other metrics. He tracks financial results and significant metrics of the companies in the portfolio and decides which stocks will form part of the scheme. Thereafter, he builds a portfolio of assets to accomplish the aims of the mutual fund. In addition, the manager evaluates risks -both single stock and macro-economic - versus potential returns. Operationally , in consultation with the investment team the fund manager is in charge of actually placing orders and buyingselling individual stocksbonds from the portfolio on a daily basis.

3. What are the metrics on which a fund manager is evaluated?

Investors evaluate fund manag ers in a number of ways. They look at his investment style, history of managing funds, past returns he has delivered, the investment style of the fund house, and the fund management team size and quality . Some also see if the fund manager himself invests in the schemes of the fund.Investors evaluate performance by seeing if the fund manager is able to outperform the benchmark chosen by him and how he fares when he compares to his peers. For example, large cap funds having the BSE-100 or Nifty as benchmark should be able to consistently outperform them over long periods of time.


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