Fund Manager Mutual Funds

A fund manager is an investment expert responsible for managing mutual funds, hedge funds, pension funds, and portfolio-management services on behalf of investors. Explore more in this article below.
Fund Manager Mutual Funds
4 mins

With an intricate blend of financial acumen and strategic insight, the fund manager plays a vital role in shaping the investment landscape. This article delves into the role of a mutual fund manager, how to evaluate their capabilities, and the significance of their contributions.

What Is a Fund Manager in Mutual Funds?

A mutual fund manager is a financial professional entrusted with the task of overseeing the investment portfolio of a mutual fund. These skilled individuals are responsible for making investment decisions that align with the fund's objectives and generating returns for investors.

Difference between an active and a passive fund manager

There are two primary types of investment management strategies that mutual fund managers follow: active management and passive management.

  • Active management: Active management is a strategy wherein fund managers proactively make investment decisions to surpass a specific benchmark or market index. This approach involves continuous research, analysis, and trading to seize market opportunities and achieve higher returns. Indian fund managers who employ active management strive to identify undervalued assets, time market trends, and adjust the portfolio accordingly. They often rely on their expertise and insights to make strategic moves tailored to the Indian market conditions.

  • Passive management: Passive management, or index investing, is a strategy wherein a fund's portfolio mirrors a particular Indian market index, like the Nifty 50 or the BSE Sensex. Passive managers aim to replicate the performance of the chosen index rather than attempting to outperform it. This strategy involves minimal buying and selling, as the portfolio's composition remains relatively stable over time. Passive investing seeks to offer consistent, market-matching returns with relatively lower costs.

Role and responsibilities of a mutual fund manager

Here is a list of the roles and responsibilities of a fund manager:

  • Portfolio construction and management: A fund manager constructs and manages the portfolio of securities that the mutual fund holds. They carefully select a mix of stocks, bonds, or other assets to achieve the fund's investment goals.
  • Strategic decision-making: Fund managers make crucial decisions based on market trends, economic conditions, and the fund's investment strategy. Their decisions impact the fund's performance and, consequently, the returns for investors.
  • Research and analysis: In-depth research and analysis are vital components of a fund manager's role. They study market trends, company financials, and economic indicators to identify potential investment opportunities.
  • Risk management: Balancing risk and return is a critical task for fund managers. They assess and manage risks associated with the investments to ensure the fund's stability and protect investors' interests.
  • Performance monitoring: Continuous monitoring of the fund's performance is a fundamental duty. Fund managers track the performance against benchmarks, making adjustments as needed to meet or exceed investor expectations.
  • Ensure Regulatory Compliance: SEBI (Securities Exchange Board of India) is tasked with formulating policies and regulations for mutual funds. It is imperative for a fund manager to ensure that the fund under their purview adheres to all regulatory guidelines.
  • Delegate Responsibilities: At times, fund managers need to entrust certain responsibilities to third-party experts to ensure profitable outcomes for investors. Tasks such as gathering investments, compiling annual reports, and interacting with brokers are delegated to these parties. By delegating these tasks, fund managers free up time to focus on market analysis and research.
  • Safeguard Your Investments: The role of a fund manager is pivotal in safeguarding investors' finances. They bear significant responsibility for ensuring the protection of investors' capital. Regardless of profit potential, a fund manager should prioritize implementing safety measures when managing investor wealth.
  • Adhere to Reporting Standards: Mutual fund managers are required to design portfolios in accordance with prescribed reporting standards. The creation of any mutual fund should take into account investor risks, objectives, strategies, policies, and expenses. It is incumbent upon fund managers to communicate these regulations to investors and ensure compliance.

How to evaluate a fund manager?

  • Examine the fund manager's track record. Consistent performance and achieving objectives demonstrate their capability.
  • Understand the fund manager's investment philosophy. It should align with your risk tolerance and financial goals.
  • Avoid managers with too many funds, as they may lack focus on each one.
  • Evaluate the manager's experience in various market conditions. A seasoned professional can navigate uncertainties effectively.

How do fund managers determine investment opportunities?

Drawing on their extensive experience and insightful perspectives, fund managers gather valuable insights from thorough research. Here are several factors they consider when deciding where to invest:

  • Monitoring Stock Market Fluctuations: Fund managers analyse stock market movements to gauge the degree of volatility.
  • Assessing Industry Competition: They evaluate industrial competition to understand macroeconomic trends.
  • Analysing Annual Business Performance: Fund managers conduct in-depth analyses of yearly business performance to inform investment decisions.
  • Evaluating Leadership Expertise: Prior to making decisions, they consider the expertise of top management and directors in addition to the aforementioned factors.

Key considerations in selecting a fund manager

While investors typically select funds rather than individual fund managers, a strong track record of performance may influence some investors' choices. Here are factors to consider when evaluating a fund manager:

  • Experience: Generally, greater experience correlates with better performance, as seasoned fund managers have navigated various market conditions.

  • Past Performance: Assess the fund manager's track record and compare portfolio performance against benchmarks or indices.

  • Investment Style: Ensure the fund manager's investment style aligns with your objectives; for example, an aggressive style may not suit conservative investors.

  • Tenure: Longer tenures with a specific fund suggest stability and consistency in performance attribution.

  • Stability: Consider whether the fund manager remains with a fund house for extended periods or frequently changes jobs, as frequent changes may signal instability.

  • Portfolio Load: Evaluate the number of funds managed by the fund manager, as overseeing too many funds may impact attention and performance.


The role of a mutual fund manager is akin to an architect crafting a masterpiece. They shoulder immense responsibilities, from constructing and managing portfolios to making strategic decisions. A skilled fund manager's impact extends far beyond the spreadsheets; they contribute to the financial aspirations of countless investors. When evaluating a fund manager, remember that their track record, investment philosophy, experience, research process, and risk management strategy hold the key to their competence. By entrusting your investments to a capable fund manager, you set the stage for a prosperous financial journey.

On Bajaj Finserv Mutual Fund Investment Platform, you can find all the information about fund managers, as well as other important information about a mutual fund, like the past performance or the expense ratio, so that you can make the right investment decision.

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Frequently Asked Questions

What is a fund manager?

A fund manager oversees investment decisions for a mutual fund, aiming to maximise returns.

How do fund managers decide where to invest?

They analyse market trends, company performance, and economic indicators to make informed investment choices.

How do I choose a fund manager for a mutual fund?

Consider their experience, track record, investment style, and tenure with the fund.

What are some key responsibilities of a fund manager in mutual funds?

They manage the fund's portfolio, make investment decisions, monitor performance, and ensure compliance with regulations.

Who is the no. 1 mutual fund manager in India?

The top mutual fund manager in India may vary based on performance metrics and investor preferences.

What is the success rate of a fund manager?

The success rate varies among fund managers and depends on their investment strategies, market conditions, and fund performance.

Are mutual fund managers paid?

Yes, mutual fund managers are typically compensated for their services. They earn through management fees, which are a percentage of the assets under management. Additionally, they may receive performance-based bonuses depending on fund performance.

What is the success rate of fund manager?

The success rate of fund managers varies widely and is influenced by factors like market conditions and individual skill. Some studies suggest that a majority of actively managed funds underperform their benchmarks over the long term. However, there are successful fund managers who consistently outperform the market.

How many hours do mutual fund managers work?

Mutual fund managers often work long hours, typically ranging from 50 to 70 hours per week. Their work involves research, analysis, portfolio management, and staying updated on market trends. The demanding nature of the job requires dedication and often extends beyond standard office hours.

What happens if mutual fund manager dies?

If a mutual fund manager dies, the fund's management company typically appoints a successor. The successor may be an existing member of the fund management team or an external hire. Investors are informed of the change, and the new manager assumes responsibility for managing the fund's investments.

What is the tenure of fund manager?

The tenure of a fund manager can vary widely depending on factors like performance, job satisfaction, and industry trends. Some fund managers stay with a fund for several years or even decades, while others may change roles or firms more frequently. Generally, longer tenures are associated with greater stability and consistency in managing the fund.

Who is a fund manager appointed by?

A fund manager is typically appointed by the fund's management company or investment management firm. The management company selects individuals with the requisite qualifications, experience, and expertise to manage the fund's investments. Fund managers are entrusted with making investment decisions in line with the fund's objectives and investment strategy.

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