Fund Management – From Different Perspectives

 

Fund management is taken up differently by different people. It all depends on what the organization or the company is, what are their services to the general public and the type of business they are into. It is the fund manager who decides on how this has to be done and it is his decision regarding the style or approach of fund management. Let`s take a look at few of these approaches and try to engage one of them for our funds.

Styles of fund management

  • Growth style – this style is mainly used when fund managers believe in high potential assets and stocks. This style has a greater emphasis on the future earnings and to gain this, the fund managers are ready to even spend more as premium on securities or assets that are expected to grow in future. Such investments or huge expenditure in the name of premium are paid by companies mainly who try to attract customers with such retained earnings that would be shown big in the final statement of the company`s financial report which is nothing but the balance sheet. This style is expected to give good and satisfying results when the market is in a bullish trend.
  • Growth at reasonable value– this is a little different from the above style wherein investments or expectations are restricted to only a limited number of securities unlike the above one, the ones that are performing well in the market. These are restricted to specific sectors, the capabilities of those that are expected to grow and increase during specific conditions and situations in the market.
  • Value style– this is an approach that is taken by the fund managers with regards to those securities that are of less importance to the investors. Generally, there are few securities in the market that are not very popular due to their low value and returns. The fund managers who are interested in this approach generally invest in such securities and try and wait for the right time to earn from them when the market favors them.
  • Fundamental style – this is the basic fund management style which is mainly adopted by the mutual fund accounts who try to cautiously make their moves in the market expecting a decent return on the investments. Here the investments are diversified and hence there are a lot of securities here. The changes in the market are constantly monitored