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Fund Managers

In: Business and Management

Submitted By darklittlejoyce
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The Duties & Functions of Fund Managers
By Thomas James, eHow Contributor
A fund manager is an individual who manages a large quantity of investments on behalf of many other individuals and institutions. Another name for a fund manager is an investment manager or investment advisor. The investments a fund manager may manage include bonds, shares in companies, real estate and even holdings in other investment funds. The term "fund manager" can also refer to an institution that manages funds, as well as an individual fund manager.

Wealth Protection

• The most important duty of a fund manager is to ensure that the wealth of his investors is protected. In order to do this, a fund manager employs sophisticated risk management techniques like value at risk to ensure that both the fund manager and the investor is aware of the magnitudes of any possible financial loss. The fund manager must also ensure that the portfolio is diversified sufficiently so as to avoid negative outcomes from big falls in the value of any one asset class.

Growth

• After protecting the wealth of those who invest in the fund, the second most important duty of the fund manager is to ensure that the wealth of the investors, as represented by the value of the fund, increases. The extent to which the value of the fund increases is usually measured against an index of other similar funds. The ultimate aim of the fund manager is to increase the value of the fund at a rate substantially greater than the risk-free rate of interest.

Risk Management

• Fund managers deploy techniques like value at risk to ensure that the risk in the portfolio of securities and assets in the fund is kept at a certain level. Fund managers also consider risk at the level of a large portfolio of securities and assets, rather than in terms of the risk of an individual security or asset.…...

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