What qre thebrecommendationd for the amc. For the mutual funds?
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When you invest with an AMC, you are purchasing a portfolio they offer. The company is principally responsible for driving the mutual fund and make decisions that benefit the investors. Under the leadership of an asset manager, it invests the money in line with the trust deed and the financial objective of the scheme. The process is broadly listed below.
a. Asset Allocation
Every mutual fund comes with a definite financial objective or a theme– this helps the asset manager to shortlist and decide on which asset to invest in. For instance, many debt-oriented funds put no more than 20% of their assets under management in equities. Or a balanced fund may choose to invest only 60% assets in equities. This is asset allocation – one of the crucial decisions a fund manager has to take on a daily basis.
b. Research and Analysis
Building a portfolio rides on plenty of in-depth study on a daily basis. Analysts study the market, micro and macro-economic aspects and fund performances regularly, and pass the reports to the manager. He makes decisions that can help the company beat the benchmark and rise above its peers (apple to apple comparison). Then the fund manager takes the final call on stock selection, which decides the fate of the fund.
c. Constructing the Portfolio
An AMC will have a slew of researchers and analysts who report their market findings and trends to the fund manager. Based on these findings and investment objectives, he chooses which securities to buy, sell or whether to hold them. This is how a company builds a portfolio, which depends predominantly on the experience and expertise of the manager.
d. Performance Review
Even with disclaimers in the fine print, an AMC faces a lot of flak from the investors and trustees, if it cannot justify its investment decisions. For instance, the company must provide unit- holders with information that have a direct impact on their holdings. It must also send regular updates on sales and repurchases, NAV, portfolio details etc. to investors.
a. Asset Allocation
Every mutual fund comes with a definite financial objective or a theme– this helps the asset manager to shortlist and decide on which asset to invest in. For instance, many debt-oriented funds put no more than 20% of their assets under management in equities. Or a balanced fund may choose to invest only 60% assets in equities. This is asset allocation – one of the crucial decisions a fund manager has to take on a daily basis.
b. Research and Analysis
Building a portfolio rides on plenty of in-depth study on a daily basis. Analysts study the market, micro and macro-economic aspects and fund performances regularly, and pass the reports to the manager. He makes decisions that can help the company beat the benchmark and rise above its peers (apple to apple comparison). Then the fund manager takes the final call on stock selection, which decides the fate of the fund.
c. Constructing the Portfolio
An AMC will have a slew of researchers and analysts who report their market findings and trends to the fund manager. Based on these findings and investment objectives, he chooses which securities to buy, sell or whether to hold them. This is how a company builds a portfolio, which depends predominantly on the experience and expertise of the manager.
d. Performance Review
Even with disclaimers in the fine print, an AMC faces a lot of flak from the investors and trustees, if it cannot justify its investment decisions. For instance, the company must provide unit- holders with information that have a direct impact on their holdings. It must also send regular updates on sales and repurchases, NAV, portfolio details etc. to investors.
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