3 min
19-September-2024
When it comes to investing and creating an investment strategy, an important decision is to choose a good fund manager. A fund manager is a person who handles or operates your mutual funds, and their strategies will impact the performance of your investments because they will apply their experience, expertise, and outlook to it. In this article, we will break down the process of selecting an appropriate fund manager who aligns and understands your financial goals and risk appetite.
Additionally, fund managers can enforce some discipline and strategic thinking that individual investors may lack. They continuously monitor and, as and when necessary, adjust an actively managed fund's portfolio over time in response to changing market conditions, keeping them consistent with your strategic plans and risk tolerance. Their skill in handling assets can translate into improved portfolio performance that you cannot achieve with a less actively managed fund.
Furthermore, it is in your best interest to utilise the skills and services of a fund manager who communicates transparently about the performance and strategy of your portfolio. This allows you to know exactly how your money is being managed and the logic behind the investment choices. The role of a fund manager is not only crucial but pretty much inevitable in managing your mutual funds.
Although past performance is no indicator of future returns, it certainly helps when a fund manager has consistently delivered superior results. Monitor the performance through several market cycles to determine how well or poorly a manager holds up under different economic conditions.
Every fund manager has an investment approach and strategy. You must thoroughly understand this about your prospective fund manager. This includes the way they allocate assets, manage risk, and select securities. Make sure their strategy matches your investing goals and risk appetite. Review the qualifications of the fund manager, namely educational qualifications and academic certifications. Experience within the industry and a well-grounded educational background in finance or economics are some indicators that someone might be a capable fund manager.
The fund house with which the manager works is also of the essence here. A fund house with a good historical record often attracts good and efficient fund managers; thus, reading up about their past is a good idea. They also offer the right tools and proper support structure for fund managers to execute their responsibilities effectively.
Apart from these, how well a fund manager handles risk is a significant indicator of their proficiency. Study their past records and check how the manager deals with market volatility and unexpected economic occurrences. This could make all the difference when it comes to weathering market downturns. Transparency in communication is key to a good fund manager. You need to know how your portfolio is performing, the accurate information on your current holdings, and the strategies being implemented with regular updates. This kind of transparency fosters trust and provides insights into how your money is being handled.
Check if the potential fund manager you are looking at is following all rules and norms that must be adhered to as per regulatory standards across the asset management space. When it comes to managing other people's money, nothing is more important than compliance—both from financial and ethical perspectives.
The Bajaj Finserv Mutual Fund platform provides several tools and resources to assist you with making an informed decision on your investments. Access top fund managers and get complete support to be in command of your mutual fund investments aimed at achieving your financial objectives. You can also utilise the mutual fund calculator to estimate potential returns on your investments.
Essential tools for all mutual fund investors
Who is a fund manager in mutual funds?
A fund manager manages your investments in mutual funds and helps maintain your portfolio. They will work according to your financial goals and are responsible for making crucial decisions like purchasing, holding or selling securities in the fund. They leverage their experience to evaluate market trends, assess the benefits of potential investments and implement strategies that will drive optimal returns. They perform market research, evaluate risk, and manage the fund’s assets to maximise profits. Fund managers have an army of analysts and researchers who conduct thorough research into investments, strategically placing them to enable the best possible returns.Why do fund managers play an important role?
Generally, fund managers are pivotal in mutual funds, given their expertise in navigating complex financial markets. Their decisions directly impact the return on investment you are going to get. A good fund manager can use their knowledge of moving market trends, various economic indicators, and their know-how of a particular sector to make well-informed investment decisions. Their experience will be key in avoiding pitfalls and taking advantage of market opportunities.Additionally, fund managers can enforce some discipline and strategic thinking that individual investors may lack. They continuously monitor and, as and when necessary, adjust an actively managed fund's portfolio over time in response to changing market conditions, keeping them consistent with your strategic plans and risk tolerance. Their skill in handling assets can translate into improved portfolio performance that you cannot achieve with a less actively managed fund.
Furthermore, it is in your best interest to utilise the skills and services of a fund manager who communicates transparently about the performance and strategy of your portfolio. This allows you to know exactly how your money is being managed and the logic behind the investment choices. The role of a fund manager is not only crucial but pretty much inevitable in managing your mutual funds.
How to find a fund manager?
Selecting the best fund manager requires several essentials. Begin by finding fund managers that specialise in the type of mutual fund you seek, and select one who has a history of achieving solid performance over many years – especially in market conditions similar to those expected ahead. Carefully inspecting the past performance of funds managed by your proposed fund manager will go a long way in this process.Although past performance is no indicator of future returns, it certainly helps when a fund manager has consistently delivered superior results. Monitor the performance through several market cycles to determine how well or poorly a manager holds up under different economic conditions.
Every fund manager has an investment approach and strategy. You must thoroughly understand this about your prospective fund manager. This includes the way they allocate assets, manage risk, and select securities. Make sure their strategy matches your investing goals and risk appetite. Review the qualifications of the fund manager, namely educational qualifications and academic certifications. Experience within the industry and a well-grounded educational background in finance or economics are some indicators that someone might be a capable fund manager.
The fund house with which the manager works is also of the essence here. A fund house with a good historical record often attracts good and efficient fund managers; thus, reading up about their past is a good idea. They also offer the right tools and proper support structure for fund managers to execute their responsibilities effectively.
Apart from these, how well a fund manager handles risk is a significant indicator of their proficiency. Study their past records and check how the manager deals with market volatility and unexpected economic occurrences. This could make all the difference when it comes to weathering market downturns. Transparency in communication is key to a good fund manager. You need to know how your portfolio is performing, the accurate information on your current holdings, and the strategies being implemented with regular updates. This kind of transparency fosters trust and provides insights into how your money is being handled.
Check if the potential fund manager you are looking at is following all rules and norms that must be adhered to as per regulatory standards across the asset management space. When it comes to managing other people's money, nothing is more important than compliance—both from financial and ethical perspectives.
Qualities of the best fund managers in India
The key to identifying the best fund managers is finding those qualities that few others exhibit. Some of these qualities are:1. Analytical understanding
An informed, analytical understanding of financial markets sits at the top in terms of a fund manager's desired qualities. Good fund managers can interpret difficult information to find trends and make decisions accordingly. With their comprehensive and rational understanding, they know what to look for when it comes to new investments, which can lead them to assess the right investments that make up a well-diversified portfolio.2. Organisational skills
Good fund managers are efficient with organisational skills. They can multitask—from the research of market conditions to asset management and all the steps in between; they can do all of it while focusing on the objectives of your funds. Efficient organisation helps them balance short-term opportunities with long-term ambitions.3. Adaptability to market conditions
Adaptability is a virtue of utmost importance in a fund manager. They must be able to modify their plans depending on market conditions, the economy, or trends in society. This flexibility allows the fund to go wherever there is value and growth and navigate uncertain markets.4. Integrity
Integrity is a trait of fund managers that should be non-negotiable. They are responsible for managing investors' money, who trust them with their hard-earned earnings in good faith. Managers must adhere to ethical standards and maintain transparency. High-integrity fund managers operate within certain ethical principles, strive to be open and honest in their communications, comply with moral obligations, including confidentiality, and act in the investor’s best interest.5. Clear transparency and effective communication
Fund managers must possess two important qualities: good communication skills and transparency. Investors should expect to receive reports on how the funds have been performing and why they invested in certain funds, as well as any alterations of strategy. When you trust your fund manager, it automatically relieves you of any integrity-related financial stress.Conclusion
Choosing the right fund manager plays an essential role in fulfilling your investment ambitions. If you are able to figure out how and where you can find a fund manager that most closely fits in with your investment outlook, you can remain assured of creating a strong portfolio.The Bajaj Finserv Mutual Fund platform provides several tools and resources to assist you with making an informed decision on your investments. Access top fund managers and get complete support to be in command of your mutual fund investments aimed at achieving your financial objectives. You can also utilise the mutual fund calculator to estimate potential returns on your investments.
Essential tools for all mutual fund investors
| Lumpsum Calculator | Systematic Investment Plan Calculator | Step Up SIP Calculator | SBI SIP Calculator |
| Tata SIP Calculator | HDFC SIP Calculator | Nippon India SIP Calculator | ABSL SIP Calculator |
