Fund management is done at its best by the fund manager of a company. But how does he do this? Is this the only job of his or is he vested with some other related duties and responsibilities too in allocating and managing the cash flows of a company? Here is a detailed explanation of the same.
Responsibilities of a fund manager
The major role or responsibility of a fund manager is to handle, maintain and control the cash flows of a company. At the same time, he also becomes entitled to hold and take some other responsibilities in the company, those that are closely related to fund management. Let`s take a look at these for better understanding.
- Long-term investments – it is based on the cash availability and cash rotation that a company plans its investments and investments plans. Now since this cash flow is maintained by the fund manager he plays a crucial role in advising the company regarding the investment opportunities and windows that would suit and be profitable for the company. Generally, companies try to make long-term investments which are considered to be very profitable. It is, in fact, the best option for companies because they can afford to hold money for a longer period of time than traders as individuals and hence companies try to get into long-term investments. So in doing this, a fund manager becomes one of the best advisors apart from the financial advisors of the company.
- Asset allocation – generally it is on the assets and bonds that companies try to trade on and the selection of the best asset is done by the fund manager. Trading market is a highly volatile one and there happen changes every moment which leads to changes in the value and performances of the assets too. So it is probably the fund manager who constantly has a watch on the market who will be able to advise the company on the same when comes to investments in a particular asset.
- Diversification – it is also important for the fund manager to work on the ratio of risks a company would be able to digest in and accordingly try to allocate funds on various assets when comes to investments. Yes, this way he would also be helping the company from incurring huge losses for the loss from one investment would be offset by a profit from the other. So this job of diversifying the investments is done well by the fund managers.