Welcome to the world of investing… Where the information available is an ocean, and only a select few have the ship to survive these overwhelming waters.
So, to invest in mutual funds (or really even make heads or tails of it at all!), you need a ship. This metaphorical ship manifests in the real world as a company that will guide you through your investment journey.
What is the meaning of an asset management company?
An asset management company (AMC) is a firm that manages and invests money on behalf of its client, a.k.a. the investor – a.k.a. you! – across various financial securities. These could include mutual funds, stocks, bonds, real estate, and other financial assets like these. Asset management companies will create and manage your investment portfolios, exposing you to a range of mutual funds and other investment instruments, to meet your individual financial goals.
What does an asset management company do?
When you approach an asset management company, you will be assigned a fund manager who will be in charge of your financial portfolio. Become best friends with this person! And pay close attention to the advice you receive from them.
The most important job of the fund manager is to understand what you are looking for from your investments and use this knowledge to make an informed decision about what assets need to be allocated to you. For instance, if you are looking for diversity then your capital allocation is going toward balanced funds, which invest in a mix of fixed-income securities and stocks.
It becomes the responsibility of your fund manager to perform the 3 key functions of the asset management company to help you build a robust portfolio. We’ve made it an acronym – ICE – for you to easily remember these functions –
Asset management companies have an important role to play, and ICE helps them help you stay on top of your financial game!
Checklist for Young Investors
Disclaimer – Selecting an asset management company requires thorough and extensive research.
But, we thought we’d share a quick checklist of things to look for in an asset management company to help you get started.
Believe us when we say that unless you’ve checked off these 3 things in your background check on an asset management company and a fund manager – you’re still looking for the right fit!
We’ll leave you with a list of some of the top asset management companies in India today –
Well, there you have the list – time to start researching the AMC that is right for you!
An asset management company (AMC) is a firm that manages and invests money on behalf of its client (investors) across various financial securities including funds, stocks, bonds, etc.
SBI Mutual Fund, HDFC Mutual Fund, ICICI Prudential Mutual Fund, Kotak Mahindra Mutual Fund, and Nippon India Mutual Fund are some of the biggest asset management companies in India today.
Three things you should vet about an AMC include its reputation, its customer reviews, and the credibility of your fund manager.
Asset management companies have various functions including research and analysis of financial assets, trading in securities on your behalf, and reviewing your financial portfolio.