Asset Manager vs Fund Manager - Which One Should You Pick?

Every investor knows that the mutual fund schemes are managed by an expert individual known as a 'fund manager.' Typically, the fund managers work with an asset management company, which is also known as the 'asset manager.' The assent manager owns the mutual fund scheme.The investment style and the strategy adopted by the fund manager are generally in line with the asset manager's strategy. However, the fund managers use their vast knowledge and experience about the different funds and market conditions and intuition while selecting the securities building portfolio for the investors.As an investor, selecting the right fund manager or asset manager will significantly impact the long-term growth. In the assetmanager vs. fund manager battle, you must know these individuals' roles in your investment before making the right choice.

The asset managers own and define the processes around mutual fund schemes' management. Most asset managers have a documented process for security selection and portfolio construction guide. This acts as a framework for the fund managers to operate. Apart from defining the process to choose the best securities and building a portfolio, the asset managers' ability to manage risks has a significant impact on your investment experience.Without the stringent risk practices, you may lose the return advantage. And, this where the asset managers play a critical role. They manage risks of several schemes and ensure that there is a clear distinction in each of the mutual fund schemes, and they give adequate attention to each to generate valuable returns for the investors.At times, the asset managers face the challenge of overlooking several schemes, and unless they have adequate resources, it can be difficult for them to do justice to each scheme. A few asset managers consciously do not launch multiple schemes and focus on only a handful of schemes to build core competence.As an investor, your first level of filter in choosing where to invest must be the asset manager. Knowing the size of the asset management company and the number of schemes they handle, and their ability to manage these schemes will help you choose the right asset manager.

The fund managers work within the framework defined by the asset managers. However, the fund managers' innovative mind, knowledge, and experience play a huge role in security selection. Besides, the individual's ability to ride the market volatility can make a massive difference to the investment outcome.Although the fund manager may follow a predefined investment process set by the asset manager, the final choice of what securities to buy and sell, when to buy/sell, and how long to hold depends on the fund manager. These factors have a massive influence on the returns from two portfolios that have similar stocks.What this implies is that the fund managers influence that outcome. However, this hold of an individual and their preferences can have a negative impact on the investment portfolio if they are too rigid with their choices. For this reason, the choice of an asset manager is important. Additionally, the fund manager may resign any day, move out to work with a different asset manager, and leave behind your investment to another fund manager.

Thus, it is quite clear that both fund managers and asset managers have a massive role in managing your investments and portfolio. If you are still wondering assetmanager vs. fund manager – who to choose, you must focus on both the variables. More importantly, you must focus on the relationship they share and how well-matched their investment styles are.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.