Find the most comprehensive mutual fund details of all leading AMCs (Asset Management Companies) in India
List of AMCs
Asset Management Companies (AMCs) are financial firms that pool funds from individual investors and invest them in securities with the objective of optimal returns for investors in exchange for a fee. By investing in a diversified portfolio across equity, debt, and risk-free instruments, AMCs maintain the diversity of the portfolio and mitigate risks.
To select securities for a portfolio, AMCs consider various factors such as industry risk, market risk, return risk, and political risk. For instance, a debt fund invests in bonds and risk-free government bonds to maintain minimum risk, while an equity-oriented fund invests in high-risk and high-return stocks and shares.
When an investor invests with an AMC, they invest in a portfolio that the AMC maintains on their behalf. The AMC ensures that the investor's financial objectives are met by conducting market research and analysis, asset allocation, creating a portfolio, and performance review.
To build a portfolio, the AMC needs to conduct extensive research on the market trends, macro and micro-economic factors, and political aspects. Based on this research, the AMC selects appropriate securities that will outperform the return expectations of investors.
The asset manager allocates funds to different assets based on the market research and the investor's financial objective. For example, a debt-oriented fund would invest just 20% in equity-oriented funds to keep the risk levels low. In contrast, an equity-oriented fund would invest more than 70% in equity and the rest in debt. A balanced fund would end up with 60% in equity and 40% in debt to balance out return and risk.
After conducting research and analysis and deciding on asset allocation, the asset manager creates a portfolio based on market findings. The asset manager makes decisions about which security to sell, buy, or hold for a specific period. The creation of the portfolio is solely based on the market expertise of professionals, research and study, and the investment goals of the investor.
The performance measurement of the portfolio becomes very important since the investor's fund is at stake. At every point, the asset manager has to justify buying, selling, or holding securities to investors and trustees. The asset manager provides regular updates to investors regarding sales, repurchases, NAV, Return on risk, portfolio changes, and factors that might affect their portfolio.
An AMC collects funds from different investors having different financial objectives. The company invests the pooled funds in a diversified portfolio and enjoys economies of scale, getting discounts on purchases. The return earned by the portfolio is then distributed among all the small retail investors.
The services provided by an AMC are charged either on a fixed basis or commission-based. Fixed fees are a monthly or quarterly amount for maintaining the fund.
Before investing in an AMC, it is essential to check the track record and performance history of the investment schemes in the past during the ups and downs of the market. The reputation of an AMC, fund manager's credibility, price and value, and fees and commission are the parameters that an investor must consider while selecting a fund house.
All Asset Management Companies are governed by the Securities and Exchange Board of India (SEBI) and the Association of Mutual Funds in India (AMFI). The key personnel of every AMC should not have any conflict of interest, and the Chairman of an AMC cannot hold the position of a Trustee of any mutual fund.