The Roles & Responsibilities of Asset Management Companies in India

The Roles & Responsibilities of Asset Management Companies in India

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What is an Asset Management Company?

When it comes to managing our funds, knowing what to invest in and how much to invest is really a challenge. For a person who is not aware of the market behavior might find this to be a tedious task. In such cases, having someone who can give you the correct advice, having someone who you can rely on in such cases is always a relief. This is done by an asset management company. A typical asset management company guides their client through the entire journey of investment, by analysis their client’s assets, analyzing industry risks and then helping them set financial goals.

Let’s have a look at how these firms go about managing the funds. www.avendus.com/india

Allocation of Assets When any mutual fund project comes to the firm, it comes with some definite financial goal which helps the asset manager to scrutinize, filter and finally decide which asset to invest in. if the funds are majorly debt oriented, then around 20 percent of their assets are put into equities. If the funds are balanced, they may choose to invest around 60 percent of the assets in equities. Therefore, this process of asset allocation is one of the crucial roles performed by asset management companies in India.

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R & A of the Market There are many things that go into building a strong financial portfolio. For this, having a good background knowledge and study of the market is indispensable. An asset manager does this for you. He or she daily spends a good amount of time studying the market in deep, analysis the market (both micro and macro), sets a benchmark for the client and helps the company to achieve it. The final call of selection of stock on which the results of the funds heavily depend on is also take by this asset manager.

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Construction of Portfolio This part of the investment journey depends a lot of the expertise and experience of the asset manager. From the research and analysis that he or she gets from the colleagues, who bring to him the report of market findings and trends he weighs all the options, studies them carefully and then decides which are the securities or fund that they would buy or sell or not do any but hold them. This in-turn helps the company build a good portfolio.

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Review of Performance No matter what number of disclaimers are put forward well in advance, an asset management company is bound to face a lot of doubts and criticisms from the investors and the trustees if they fail to justify the investment decisions. It is the client’s money after all. Hence, it is a mandate for the company to provide information basis which the decisions were taken and send regular reports on purchases, sales, repurchases and so on.

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Thank You

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