What does fund management mean and what does it do?

1. What does fund management mean and what does it do? The process of managing funds for big businesses is called fund management. Mostly, fund management refers to maintaining mutual funds that a business has invested in. In a way, it is managing the cash flow in any business by overseeing the funds coming in and going out. The job of a fun manager is to make sure that the date on which the funds mature, are in sync with the dates on which the loans are demanded. For this, the fund manager needs to do a thorough study of the current asset and liability position of the business, since these are the elements that affect issue of credit from the bank. Sometimes, fund management is also called asset management, since it does involve investing in assets such as shares, bonds, long only funds, mutual funds and so on. Assets are of two main kinds, tangible and intangible. As the name suggests, tangible assets would be those that can be physically seen by the eye. Whereas, intangible ones are those that cannot be seen or felt but show up in the back account, such as the shares and bonds. One of the reasons for success of any financial institution is due to their ability to provide credit to their customers. It is their duty to ensure proper liquidity to the firm that they are providing service too. Largely, the use of fund management is divided into four broad categories, namely, public sector, business and enterprise industry, financial investment industry and industry of infrastructure. A fund manager has to know their client’s portfolio thoroughly, to make decisions regarding their investment decisions. For this, having a close watch on the market trends and situations and being able to anticipate any kind of crests and troughs is very important from a fun manager stand point. How else will they be able to help their clients grow. Be it mutual funds, ESG funds in India or anything else, fund managers need to pay careful attention on increasing the client’s cashflow and assets and decrease in liability too. www.avendus.com

2. Fund management comes in different types. As discussed, there already is the mutual funds, along with trust funds, hedge funds, pension funds and equity. It is up to the fund manager to decide the combination of funds or assets for the client, according to their portfolio. They need to plan it in such a way that they get maximum returns in minimum or stipulated time period. This time period can vary from months, to a few years to a decade as well. This diversification of assets or investment in assets helps to cushion the blow if any on the client’s financial portfolio. If any asset does not perform well, goes into losses, then they always have other assets and investments to pull them back in to the game. This kind of diversification needs intense planning and should form a correlation between liability and asset return in order to yield maximum benefits. The growth of a company’s assets, funds and cash flows, are well managed b a fund management firm. www.avendus.com