Asset Management Company (AMC) is a firm that altogether manages the Mutual Funds and its schemes.
The AMC collects money from several investors (both individual and institutional) and then invests the collected money in suitable securities (mutual fund schemes) according to the investment objectives of the investors.
To decide where the money must be invested, the AMC has the professional fund managers. They are the ones engaged in the buying and selling of securities on behalf of the investors.
The investment is made only after studying the investment environment including market and industry risks. The supreme aim of this is to ensure a profitable investment so that the investors get maximum returns.
What are the constituents of Asset Management Company?
The AMC comprises of the Chief Investment Officer (CIO), the fund managers and market analysts, who together work towards managing the various mutual fund schemes launched by AMC.
There is also a Compliance Manager who ensures that all the activities of the AMC comply with SEBI’s rules and regulations.
How does AMC manage the Mutual Funds?
The AMC offers a mutual fund portfolio for the investors to buy. Let us now see how the AMC manages the mutual fund.
a) Asset allocation- each mutual fund scheme will have its investment objective. So based on the objective, the fund managers will decide the assets in which the investment has to be made.
b) Market Research and Analysis – Experts/ Market analysts of the AMC will in detail study the various aspects of the investment market and also regularly monitors the funds’ performance. The reports are then given to the fund manager, who then makes investment decisions to generate good returns for the investors.
c) Building the Portfolio- Based on the market research findings and investment objectives, the fund manager will choose the securities to buy or sell. This is how an AMC constructs a portfolio, which depends mainly on the experience and expertise of the fund manager.
d) Performance Evaluation/ Review- AMC will regularly monitor the performance of the fund and provide the investors with timely information and updates that have a direct impact on their holdings. This will help to reinforce the trust of the investors.
To summarize, we can say that the success of investing in a Mutual Fund to a large extent depends on the Asset Management Company (AMC). Hence, it is advisable to choose an AMC that has a good track record (reputation) with expertise professionals as fund managers.
List of Mutual Funds Companies
2. SBI Mutual Funds.
3. DSP Black Rock Mutual Funds.
4. Kotak Mutual Funds.
5. HDFC Mutual Funds.
