The Roles & Responsibilities of Asset Management Companies in India

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The Roles Responsibilities of Asset Management
Companies in India
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What is an Asset Management Company?
When it comes to managing our funds, knowing what
to invest in and how much to invest is really a
challenge. For a person who is not aware of the
market behavior might find this to be a tedious
task. In such cases, having someone who can give
you the correct advice, having someone who you
can rely on in such cases is always a relief.
This is done by an asset management company. A
typical asset management company guides their
client through the entire journey of investment,
by analysis their clients assets, analyzing
industry risks and then helping them set
financial goals. Lets have a look at how these
firms go about managing the funds.
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Allocation of Assets
When any mutual fund project comes to the firm,
it comes with some definite financial goal which
helps the asset manager to scrutinize, filter and
finally decide which asset to invest in. if the
funds are majorly debt oriented, then around 20
percent of their assets are put into equities. If
the funds are balanced, they may choose to invest
around 60 percent of the assets in equities.
Therefore, this process of asset allocation is
one of the crucial roles performed by asset
management companies in India.
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R A of the Market
There are many things that go into building a
strong financial portfolio. For this, having a
good background knowledge and study of the market
is indispensable. An asset manager does this for
you. He or she daily spends a good amount of time
studying the market in deep, analysis the market
(both micro and macro), sets a benchmark for the
client and helps the company to achieve it. The
final call of selection of stock on which the
results of the funds heavily depend on is also
take by this asset manager.
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Construction of Portfolio
This part of the investment journey depends a lot
of the expertise and experience of the asset
manager. From the research and analysis that he
or she gets from the colleagues, who bring to him
the report of market findings and trends he
weighs all the options, studies them carefully
and then decides which are the securities or fund
that they would buy or sell or not do any but
hold them. This in-turn helps the company build a
good portfolio.
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Review of Performance
No matter what number of disclaimers are put
forward well in advance, an asset management
company is bound to face a lot of doubts and
criticisms from the investors and the trustees if
they fail to justify the investment decisions. It
is the clients money after all. Hence, it is a
mandate for the company to provide information
basis which the decisions were taken and send
regular reports on purchases, sales, repurchases
and so on.
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Thank You
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