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Asset Management Companies – The Essential Facts You Need To Know

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By Author: Rudra Raghavan
Total Articles: 5
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In order to create a corpus, you need to first save and invest money prudently. You can choose from a wide range of investment instruments and invest personally or even approach an asset management firm to help you invest in different securities so that you can achieve your personal and financial goals. Your financial advisor tries to understand your risk appetite and goals and helps you invest in shares, mutual fund companies, bonds, equities, money market instruments and so on. But before you select an asset management firm for your investment needs, you need to have all the essential information. Here’s all you need to know.
Asset management companies and fund management
When you approach an asset management company for your investment needs, you purchase the portfolio offered by them. Principally, AMCs are responsible for making decisions that directly benefit the investor. These companies typically assign a financial expert known as an asset manager who leads the investments and invests your funds in accordance with a financial objective related to different investment schemes.  Typically, AMCs follow the below mentioned strategies to manage your assets.

AMCs shortlist a wide variety of investment options based on the underlying theme, investment period or financial aim before investing your sums. For instance asset managers investing in a mutual fund company, will check the type of mutual fund and then make the investment.

AMCs research and analyse the various investment options available. They will also research about the performance of the investment instruments and funds and look at reports of the past few years before investing your sums.

The asset manager also helps you create a diverse investment portfolio that allows you to invest different sums in different investments and also helps with mitigating any risks in case of unpredictable, fluctuating market conditions.

AMCs also conduct regular reviews of your investments to check how your funds are performing from time to time. The asset manager assists you in taking calls regarding selling or buying new investment instruments and modifying your investment portfolio frequently.

Things to consider while choosing an AMC for your investment needs
The AMC you choose makes a huge difference in helping you attain your investment goals. As such, you must pay careful attention while choosing a company for your investment needs. Typically, you should consider the following factors before finalising asset management companies in India to help you with your investments.

Consider the AMC’s reputation, read customer reviews and speak to other investors before handing over your hard-earned money to the AMC for investments.

The reputation of the fund manager also makes a huge difference. Check the performance of other instruments handled by the fund manager before finalising the AMC.

Pay attention to the value of the AMC. For example, if you are earning a smaller amount from a fund, then it does not make much sense to purchase a fund, no matter how cheap it is.

The fees levied by AMCs differ from one AMC to the other. A few companies may levy a fixed charge while others may charge a commission. It is better to opt for the service of AMCs levying a fixed charge than paying a commission.

Final word: Asset management companies evaluate different metrics such as market and industry risks before investing your money. They then make the decisions that can help you attain your investment goals. The ultimate gain of AMCs is to ensure that your investment proves profitable – one that provides you maximum returns over a stipulated tenure and which allows you to fulfil your personal and financial goals.

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