Mutual Fund Manager – An Introduction
Becoming a mutual fund manager means serving one of the most respected and well-paid job profiles in the financial industry. Mutual fund managers, as the term suggests, oversee funds for private or institutional investors. They also consult them on portfolio diversification strategies. Besides this, they are responsible for strategically investing the investor’s funds in different financial instruments, such as stocks and bonds, to ensure profit-making goals are met in every situation.
Fund managers work in asset management companies (AMCs) and are known for using their financial acumen to make profitable investment decisions. When suggesting the private or corporate investors about the potential investments, mutual fund managers utilize their superior analytical skills to read the market trends and forecast short- and long-term returns for their clients.
For someone willing to build a career in mutual fund management, it is desirable to have a thorough knowledge of the financial markets, factors influencing the instrument prices, and the required qualification. The rest of this article will elaborate on the fundamentals of how to acquire a mutual fund manager position.
How to be a Mutual Fund Manager
While it all starts with earning a degree and passing a few exams, an aspiring candidate needs to be dedicated, determined, and diligent in the share market to be eligible for the position. We have simplified the whole process into several steps to explain what it takes to be a mutual fund manager.
- Educational Qualification: The foremost step is to have a strong educational background in commerce or business administration in finance. Also, several short-term or diploma courses in investment analysis and management can pave the path for getting the job.
- Internship: After earning a degree in the relevant subject, you must not shy from taking an internship to gain hands-on industry experience. Various equity and fund houses offer such opportunities that you can grab to hone your fund management skills.
- Get a Certification: The next step is to become a certified financial analyst (CFA) or certified financial planner (CFP) by completing an examination administered by a financial institute. It will establish you as a credible and capable candidate in the eyes of AMCs.
- Learn Financial Skills: Mutual fund management is all about knowledge and skills, so learn as much as possible. Security analysis, financial modeling, investment risk management, fixed-income market, and modern portfolio theory are to name a few.
- Work as an Analyst: Know that nobody will offer the position straight away, which means you need to start from small. Find a job as a mutual fund analyst at any mutual fund company. By assisting a mutual fund manager in monitoring fund performances and identifying investment opportunities, you can become a fund manager within a few years.
As for most professional jobs, a mutual fund manager post requires academic credentials in the related field. A minimum of a bachelor’s degree with a specialization in commerce, economics, finance, or mathematics is all that you need to be considered for the profile. However, having a postgraduate degree in MBA in finance or economics from a reputed management institute or university would make you a preferred choice for the job at mutual fund companies. Earning a Doctorate could have additional benefits but is not required.
Roles and Responsibilities
A mutual fund manager handles various tasks related to investment and management of the portfolio of assets, including stocks, bonds, and mutual funds. In a Mutual vs Hedge Fund scenario, the former is a relative returns fund while the latter is an absolute returns fund. The mutual fund manager considers variables, such as price movements, dividends, and price-to-earnings ratio, to execute strategies effectively. A detailed description of what a mutual fund manager does is as follows:
- Advise clients about investment options.
- Analyze financial market trends to ensure investment profits.
- Collaborate with fund analysts to identify the best investment opportunity.
- Conduct performance analysis and risk evaluation for mutual funds.
- Deliver maximum returns on investments.
- Discuss the long-term investment strategy with the individual or retail investors.
- Make decisions about funds investment and exit.
- Manage debt, equity, and diversified funds.
- Monitor the investments and explore new investment propositions.
- Research various mutual funds before recommending them to the investors.
Attractive Income and Possible Benefits
Salary is no bar for a mutual fund manager with a wealth of knowledge and experience managing multiple funds. A professional in this position can earn anywhere between $55,000 and $125,000 annually on average. If the performance bonuses are added to the mutual fund manager’s salary, the average annual compensation might reach as high as $150,000. The variance is mainly due to the financial institutions. Usually, the mutual fund companies pay the highest, followed by the brokerage firms, insurance companies, and banks.