Importance of a good fund manager

By | April 27, 2011

The importance of having a good fund manager is as important as putting your health in the hands of your family doctor. There will not be any meaning left if at the end, you opt for a personal loan or a car loan to fulfill your financial goals. A manager who is able to inflate your returns, no matter how small they are, is considered to be the best.

A manager who exhausts all your time by talking about the mechanism as to how their fund house works, the products they sell and their role in investment decision making etc., are not the proper ones to approach. Such managers look to exploit their customers by not disclosing all their terms and conditions of the agreement, the pricing policies etc.

According to experts, there are two things that could produce extra returns. “One is the investment philosophy set by the chief investment officer in an AMC and the other is the “calls” that the individual fund manager makes,” says Sreekanth Meenakshi , founder,

“It is the fund manager who, over a period of time, generates that extra alpha over the benchmark through proper stock selection and risk management,” says AV Srikanth, director, wealth management, Anand Rathi Wealth Advisors.

As a prudent investor, it is important to keep the following things in mind:

  • Select the right fund house is very important since it is the fund house that moderates a fund manager’s call relating to the investment decisions.
  • A fund house that follows a process driven approach helps the fund manager deliver good returns.
  • Do a background check of your fund house and find out what are the past records and their ability to deliver what they promised. This will give you the confidence to invest with them.
  • A fund that consistently wins awards can be a testimony to the fund manager’s ability.

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