Fund Manager and Mutual Fund performance

Fund Manager is the person appointed by the trust (AMC), the term we discussed earlier blog of Mutual Fund to take care of Investors money who all have invested into particular Mutual Fund house let it be in Equity or in Debenture/ Bonds. It is the person to whom we generally believe that he/she will give returns on our investments over a period of time. But how he is going to do it for us?… Simply AMC pays fees to him for the job in which he is qualified and experienced.

Fund Manager and its Role

The Fund Manager takes decisions on behalf of the AMC or can say on behalf of Investors about the purchasing and selling out of stocks of various companies depending on his own research and analysis about the future of the particular stock. Role of Fund Manager is critical for any Fund House because ultimately he is the one who will be witnessing and tracking the market in true sense for investors and trade accordingly on their behalf. 

If we are investing in a Mutual fund house that means :

⇒ We don’t have any experience of how the market operates and how should we start investing in it.

⇒ Also, we don’t want to get exposed to unnecessary risk of market volatility, so fund house hires a well experienced and qualified person who can predict the future of the market by his vast knowledge in the market. He has his own methods of calculations, researches about market behavior and accordingly takes the decision in lieu of his fees.

The fund manager is responsible for Complying with the requirements of regulators, tracking the performance and growth of funds and also it is his primary duty to give cover to the investment made by the customer from market volatility and generate returns. So, he is the one who is going to play with your money on your behalf in the stock market but with great care and exceptional skills.

But before investing in any AMC / Mutual Fund House just consider some factors:

⇛ Look for the tenure of the Fund Manager in the current mutual fund house and if the same person is performing duties of Fund Manager in the past when the fund gives good returns than you can continue with the mutual fund house provided all other conditions for investments are met.

⇛ If the Fund Manager is freshly appointed in the current Fund House in which you are planning to invest than just have the patience for 8 to 12 months and track the performance of the fund. If in this period also, fund performs well, then you can opt for it otherwise go for another fund house.

⇛ If Fund Manager is changed or he left the AMC after you invested than please don’t go fast and take any hasty decision and in that case as well, just wait for another 8 to 12 months and track the performance of the fund. If in this period also, fund performs well, then you can opt for it otherwise go for another fund house.

Fund Manager is an employee of the fund house and he operates in lieu of the fees. Fund Manager’s fees which are discussed in detail in another blog on 6 types of Mutual Fund Cost is also too be borne by the customer like you and me which will impact our investment for sure. So while planning to invest in fund its associated mutual fund cost must be known and taken into consideration.

SEBI

SEBI (Security Exchange Board of India) is the regulator of the commodity and security market in India and all the Mutual Fund must be registered with SEBI. SEBI can be visited through its Official website and It keeps an eye on the performance and default and accordingly provide guidance to the houses for the sake of consumers.

It Defines large-cap as one that features within the first 100 companies by market capitalization on the stock market, Midcap from No. 101 to 250, and Small Cap 251 and below. But in general, one other definition is being followed for Companies to be categorized as Large-cap which has its Market Capitalization of more than 10,000 Crore, Mid Cap companies have their Market Capitalization from 2500 to 10,000 Crore. While Small-Cap companies have their Market Capitalization below 2500 Crore.

So it can act as a guideline for you to select your fund for investment and better prospectus in the future.