We live in an age where markets are becoming more complex and unpredictable, and navigating investments alone can feel daunting. That’s where fund managers come in—experts who understand the workings of the market and make informed decisions on your behalf. But have you ever wondered why their expertise is crucial for your financial success?
In this article, we shall explore what fund managers do and who are the top fund managers you should know about. Let’s dive into the minds behind the numbers.
Who is a fund manager?
A fund manager is a financial expert who executes investment strategies and oversees the management of mutual funds, hedge funds, trust funds, pension funds, and other financial assets on behalf of various investors.
They also play a vital role in researching and selecting the most suitable stocks, bonds, or other securities that align with the fund’s strategy, as detailed in its prospectus. After that, fund managers execute buying and selling decisions to improve the portfolio. A fund can be managed by one person, by two people as co-managers, or by a team of three or more analysts and traders who assist in these tasks.
Fund managers typically earn fees based on a percentage of the fund’s average assets under management (AUM).
Understanding Fund Managers
Fund managers are skilled at managing portfolios and making informed decisions on behalf of investors. With their proficiency and market insights, they assist individuals and enterprises in achieving their financial goals in sync with market conditions.
While a fund’s performance may have much to do with market forces, the manager’s skills are also a contributing factor. A highly trained manager can lead their fund to beat its competitors and their benchmark indexes. This kind of fund manager is an active or alpha manager, while those who take a laidback approach are called passive fund managers.
Fund managers must have good business, math, and people skills since they manage a team of investment analysts who oversee an investor’s financial assets and direct their activities.
Qualifications and Skills required to be a Fund Manager
A combination of academic qualifications, technical skills, and soft attributes is essential to become a successful fund manager.
Qualifications:
- Bachelor’s Degree: A bachelor’s degree in finance, economics, accounting, or a related field is typically required.
- CFA Charterholder: While not always mandatory, the Chartered Financial Analyst (CFA) designation is highly respected in the industry and can significantly enhance career prospects.
- Master’s Degree: A master’s degree in business administration (MBA) specializing in finance can provide a deeper understanding of financial markets and investment strategies.
Skills:
- Financial Analysis: Strong analytical skills in evaluating financial statements, market trends, and investment opportunities.
- Risk Management: The ability to assess and manage investment risks to protect investors’ capital.
- Portfolio Management: Knowledge of portfolio construction, diversification, and rebalancing techniques.
- Market Research: The ability to gather and analyze market data to identify potential investment opportunities.
- Communication: Excellent verbal and written communication skills to interact with clients, investors, and colleagues.
- Problem-Solving: The ability to think critically and solve complex financial problems.
- Technology Proficiency: Familiarity with financial software and tools to analyze data and manage portfolios efficiently.
- Ethical Conduct: Adherence to ethical standards and regulations in the financial industry.
- Adaptability: The ability to adapt to changing market conditions and investment strategies.
- Leadership: Strong leadership skills to manage teams and guide investment decisions.
Responsibilities of Fund or Money Managers
- Research and Security Selection: Money managers identify and choose the most suitable stocks, bonds, or other securities that align with the fund’s investment strategy.
- Actively Managed vs. Passively Managed Funds: Actively managed funds aim to exceed a benchmark by frequently making buy/sell decisions, whereas passively managed funds seek to match an index’s performance with low trading activity.
- Performance Reporting: Fund managers generate performance reports to inform clients about the fund’s progress and returns.
- Client Engagement: They create materials for potential clients and identify investors or companies that fit the fund’s investment approach.
- Strategy Alignment: Fund managers ensure that their investment decisions align with the fund’s objectives and long-term strategy.
Top 10 Fund Managers in India
Here is a table that presents the details of India’s top 10 fund managers. It makes it easier to compare the key points at a glance.
| Fund Manager | Fund House | Specialization/Approach | Notable Achievements |
| Prashant Jain | HDFC Mutual Fund | Value investing and careful investment strategy | Over two decades of experience, consistently great returns across stock funds |
| Neelesh Surana | Mirae Asset Mutual Fund | Focus on emerging markets, innovative investment strategies | Successfully managed volatile markets, delivering solid gains for investors |
| Kalpen Parekh | DSP Mutual Fund | Equity and hybrid funds, spotting business opportunities | Strong track record in managing stock and mixed funds |
| Sankaran Naren | ICICI Prudential Mutual Fund | Risk management, diverse investment techniques | Senior figure in the industry, stable returns across multiple funds |
| Anoop Bhaskar | UTI Mutual Fund | Stock picking and portfolio building | Key to UTI’s equity funds success with deep market knowledge |
| Vinit Sambre | DSP Mutual Fund | Intelligent investment strategies in equity | Consistently outperforms benchmarks, rising star |
| Harsha Upadhyaya | Kotak Mutual Fund | Risk management, disciplined investment technique | Steady returns across market cycles |
| Rahul Baijal | Nippon India Mutual Fund | Equity and debt fund expertise | Strong asset selection and risk management |
| Suresh Soni | Baroda Mutual Fund | Research-driven strategies, market trend understanding | Consistent results across Baroda Mutual Fund schemes |
| Vetri Subramaniam | UTI Mutual Fund | Innovative investment methods, identifying growth opportunities | Significant role in the growth of UTI’s equity funds |
Factors to Remember While Choosing a Fund Manager:
Adaptability to Strategy
A fund manager who adapts their investment strategies based on market conditions ensures consistent management of funds. This flexibility helps them stay aligned with changing trends.
Evaluate Past Performance Carefully
A careful evaluation of past performance shows a fund manager’s methodical approach. It reflects their ability to navigate challenges and find opportunities within the market.
Understand the Manager’s Risk Tolerance
Select a fund manager whose risk tolerance matches your own, whether conservative or aggressive. This alignment will tell you how they handle market volatility.
Focus on Undervalued Stocks
A skilled fund manager can spot undervalued stocks due to their deep understanding of market trends. This expertise helps them find opportunities that others might miss.
Mutual Funds vs. Equity Investing
Fund managers use different strategies for mutual funds vs equity investing. A mutual fund manager does not have to discuss his decisions with the investor. However a fund manager of an individual investor has to discuss his or her ideas before making any decision.
Share Market Advisory Expertise
Choosing a fund manager with a share market advisory team may be necessary because they provide expert insights on market trends. This guidance may help you make informed decisions and enhance the effectiveness of your investment strategy.
Avoid Big Names for Better Focus
Avoid being influenced by large fund houses. They often highlight asset gathering, which can lead to average results. On the other hand, smaller, specialized managers may have a more focused approach, making them better at finding hidden opportunities like undervalued stocks.
Conclusion
Fund managers play a crucial role in steering the complex world of investments through actively or passively managed funds.
Their success lies in their expertise in selecting securities, managing portfolios, and communicating with clients. Understanding these differences can help investors make informed decisions and choose the right fund manager to meet their financial goals.
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FAQ
What does a fund manager do?
A fund manager is a monetary professional responsible for managing a fund’s investments on behalf of various investors. They play a central role in researching and selecting the most suitable stocks, bonds, or other securities that align with the fund’s strategy as detailed in its prospectus.
Who is the richest fund manager in India?
Sankaren Naren is the richest fund manager in India. He joined ICICI Prudential in October 2004 and managed the ICICI Prudential Dynamic Plan and the ICICI Prudential Top 100 Fund.
How do fund managers get paid?
Most fund managers receive a base salary each year, plus other forms of compensation. These include base salary, fulcrum fees, deferred compensation plans, equity and stock options, performance bonuses for the company and teams, and nonmonetary benefits.
I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.
