Who is a Fund Manager & What Is Their Role in Mutual Fund Investments?

Investing in mutual funds has become increasingly popular, thanks to the ease of investment procedures offered through apps with user-friendly interfaces. However, do you know who manages all that investment? A mutual fund manager is the person who manages all those investments. 

As of January 2025, the total number of fund managers in India rose to 482 from 473 the previous year, with 433 male fund managers responsible for managing various fund houses. Continue reading to know who a fund manager is, their roles, types and key skill sets.

Quick Synopsis

• A fund manager is the person whom you trust the most when considering mutual fund investment decisions. 
• Mutual fund managers either take an active approach to outperform market benchmarks or a passive one, and then consider index-tracking. 
• Their key responsibilities are managing portfolios, making strategic decisions, assessing risk and forecasting financial performance. 

Who is a Fund Manager?  

A mutual fund manager is a professional who makes investment-related decisions on your behalf. They develop strategies by analysing market trends, economic conditions and other factors and decide which assets to buy or sell and when and how to generate more returns for investors. 

When considering a fee, most of a fund manager’s salary is linked to the Assets Under Management (AUM) of the fund.  

What Does a Fund Manager Do? 

Buying and selling mutual fund units is not the only job that a fund manager does. There are other responsibilities they need to perform, including:

• Developing and Managing Portfolio

They build the specific fund’s portfolio by mixing different assets so that the scheme can match its objectives.

• Make Strategic Decisions

Fund managers conduct extensive research and analyse market reports to spot great investment opportunities.

• Monitor Performance and Manage Risk

They constantly monitor the fund’s return against benchmarks, assess risk potential and then make adjustments accordingly. 

• Comply with Regulations

Mutual fund managers in India must strictly adhere to the rules and guidelines set by the Securities and Exchange Board of India (SEBI). 

• Delegate Tasks

Activities, such as preparing reports or communicating with investors, are often delegated to third parties. It allows managers to focus more on developing investment strategies.

Types of Fund Managers 

Based on the fund’s nature, these professionals use different management styles to protect your investment:

Active Fund Managers

These managers prefer direct involvement over a theoretical or indirect management style, aiming to help their funds outperform the market. They are often paid more due to their active management style.

Passive Fund Managers

They follow a hands-off approach, managing funds that aim to mirror the performance of a market index. Their fee structure is comparatively lower due to their passive approach. 

Sectoral or Thematic Fund Managers

These managers focus on specific industries or sectors (such as technology, solar, renewable energy or pharma).

Top Mutual Fund Managers in India  

Here is a look at some of the leading mutual fund managers in India: 

Qualities of a Top Fund Manager 

Having deep market knowledge is the primary quality that a top manager must have. Here are other skillsets that set them apart:

• Strong Analytical and Quantitative Skills

The best fund managers can process a huge amount of complex financial data, spot ongoing market trends and utilise their experience to make the wisest decisions regarding investments.

• Decision-Making Skill Under Pressure

To excel under pressure, top-level fund managers have exceptional emotional intelligence, disciplined risk management capacity and the ability to maintain a long-term perspective despite market volatility.

• Risk Management Capacity

Great managers know how to navigate risks. They apply the right strategies and minimise the loss while maximising profit out of your investments.  

• Ethical Responsibility

Top-level fund managers know how to handle other people’s money. They are well aware of their ethical responsibility. 

• Continuous Learning and Adaptability

Investment in mutual funds is subject to change. Market trends are never constant and neither are the regulations and opportunities. Successful fund managers adapt quickly and keep themselves well-informed. 

How Do Fund Managers Spot Investment Opportunities? 

Beyond conducting extensive research and gaining deep industry knowledge, there are other key factors they consider to spot the right investment opportunities: 

• Tracking Market Movement

They monitor movement in stock prices and the overall performance of their investments and the market to stay ahead of changes.

• Making Competitive Analysis

Fund managers evaluate the competitiveness of an industry or sector, evaluate its growth potential and make decisions accordingly.

• Reviewing Annual Performance

They conduct company-specific research, reviewing earnings, financial health and performance to identify investment prospects.

Final Word 

Understanding who a fund manager is and what they do is essential, especially for new mutual fund investors. They are the person on whom you rely for all the investment-related decisions. So, you must consider several factors while evaluating a fund manager, such as investment strategy, past performance, experience, risk management capabilities and fees.

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