What is the difference between an investment manager and a fund manager?
Both investment manager and fund manager perform similar duties towards investment decisions. A fund manager is responsible for implementing a fund’s investment strategy. An investment manager is responsible for making investments on behalf of their clients. Both of them make their decisions based on extensive market research.
An investment manager is a person or an organisation that makes portfolio investments under the investment objectives and parameters mentioned by the client. Furthermore, an investment manager may handle all the activities relating to a client’s portfolio. These activities include day-to-day trading of securities, portfolio monitoring, performance measurement, client reporting and many more. They charge fees on the percentage of clients assets under management.
A fund manager is the one who is usually working in fund management with mutual funds, pension funds, trust funds, hedge funds, etc. A fund can be managed by a person, two persons as co-managers or a team of people. Also, fund managers are paid fees for their work, which is the percentage of the fund’s asset under management.
Therefore, an investor must review the investment style of both the managers before deciding to invest in a fund or giving their portfolio.
Who is a pension manager?
A pension manager is responsible for all aspects of administering pension schemes. A pension manager can be an individual or a company. They also manage pension funds on behalf of their employees. Furthermore, they work similarly to mutual fund managers. They receive subscriber contributions and invest in equity or bonds in the financial market. Also, they aim to maximise returns for a given amount of risk.
What does fund management mean?
Fund management means overseeing and handling a company’s cash flow through a professional fund manager or a fund management company. The fund manager is responsible to invest the company’s funds to generate profits in return. The fund manager charges fees on the percentage of assets under management.
Fund management broadly covers any system. It applies to both tangible and intangible assets. It is also referred to as investment management. The fund management can be classified by investment type, client type or the method used for management. Following are the various types of investments managed by fund management professionals:
- Mutual funds
- Trust funds
- Pension funds
- Hedge funds
- Equity fund management
There can be a classification of fund management for a client. These fund managers can be personal fund managers, business fund managers or corporate fund managers. Also, the fund manager for a client deals with a small quantum of investment funds.
Why is fund management important?
The primary importance of fund management is diversification. It is the process of allocating funds to different asset classes to make risk-free as possible while maintaining the desired return. With proper asset allocation, it helps to match the short term and long term goals of the investor. Also, with professional fund managers, it helps in strategy-based investing. Furthermore, this ensures that the fund remains true to its objectives of the investors. Fund management is a successful way to implement a proper investment strategy.