Who is working on your money in Mutual funds?

Have you ever wondered who is working on your money invested in Mutual funds?

To start with, your money in mutual funds is managed by Fund managers. Fund managers have experience of close to 15 to 20 years in capital markets (Stock markets). Fund managers are assisted by a team of Research analysts. These analysts study companies’ balance sheets, P&L statements and cash flows statements over the last 10 to 15 years. They listen to quarterly concals with managements, they visit companies’ offices and factories to understand and evaluate the companies’ products/services and management. They do forensic audit on the companies’ financial statements to detect and analyze cases of fraud and other financial crimes.

After all this in-depth analysis, your money will be invested in stocks of 50 to 60 different companies from diverse sectors viz. Banking, financial, IT, FMCG, capital goods, automobile, pharma & health care, building materials, QSR, construction/realty, engineering, oil & gas, chemicals, internet/platform, gaming etc.

The management, CEO and employees of these companies work hard day-in and day-out to grow the sales and profits consistently y-o-y. This leads to increase in share prices of these companies and in turn results in increase in Mutual fund NAVs (Net asset value). This is how your money grows in Mutual funds.

Last but not the least, I also work on your money. I go through all the mutual fund schemes available in the industry, analyze them and select few good schemes based on consistency in performance, investment process, risk management framework, quality of fund managers and analysts, culture of the Asset management company etc. and monitor these schemes performance.

Even though you don’t own any business, still you are like a business owner because your money in mutual funds is invested in so many businesses (companies’ shares) and the managements and employees are literally working for you.

So, a lot of people are seriously working on growing your money. Relax and let the experts work for you.

Disclaimer:

Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing. Past performance is not indicative of future returns. Please consider your specific investment requirements before choosing a fund, or designing a portfolio that suits your needs.