How Mutual Funds Are Professionally Managed, And How Can Investors Trust Them?

Every mutual fund has a manager and a team of experts who are constantly studying and monitoring the industries that the fund has invested in and can move the money around in the most beneficial fashion.

Imagine that you want to file a legal claim. What a hassle it would be if you tried to do it all on your own! The legalese has to be learnt, the procedures understood, there is usually one hearing after another, one claim followed by a counter claim and tons and tons of paperwork. By the time you get it tackled, you are frustrated, exasperated and would not necessarily have achieved your goal. What a painful process!

But, if you knew a really good lawyer, would that not be so much easier? The lawyer already knows who to talk to, understands the language, is prepared well in advance for any counter claims that would be filed and can smoothen the process and make it feel like a breezy walk in the park. All that you would have to do is go along with it and be present when you need to be.

Any professional help does just that – somebody who is a specialist in the field understands how things work, has tons of experience handling the job at hand and can guide us in a calm, collected and rational fashion. A professionally managed fund makes our process of investing way easier in much the same fashion.

When someone says that a mutual fund has a manager, don?t imagine a single guy in a suit sitting in a cramped office and burdened by tons of paperwork. What they mean by that is that you have an  entire team of professionals managing your money for you.

Every fund is launched with an investment objective and strictly operates only in line with that objective. For example, an auto fund operates with the objective of investing in the automobile sector. The objective of the fund can be determined not just based on industries but by different investment goals. For example, there are also high-risk and low-risk funds. The team that manages the fund has „sectoral analysts? (each analyst studies one particular sector) and „research analysts? (each analyst studies one company or stock within the sector).

The fund manager is constantly provided feedback on the different sectors or companies that the fund focuses on and the decision to invest in or sell a stock is based on this continuous feedback, monitoring and analysis. Each fund forms a  committee of experts and all decisions are taken based on the expertise of the committee and not on the whim of a single individual.

Both the breadth and the depth of the data that is analysed by the fund is therefore, significantly more than what a layman can manage. Investing in such  professionally managed funds ensures not just better returns on your investments, it also ensures that all the hassles of investing are removed and that your energies can be invested in your own area of work and specialisation.

Of course, any professional services comes with a fee but the charges and the  expenses are negligible when compared to the returns, especially the peace of mind in knowing your money is in good hands!