How to Become a Mutual Fund Manager?

To put it simply, a Fund Manager manages the funds used for financing by single or corporate investors. Fund Managers are now common in areas like Mutual Funds. Here, separate investors mostly lean on the proficiency and skills to render them with useful knowledge and information, allowing them to invest in rightly in companies, bonds, etc. 

An aspiring candidate who seeks to become a mutual fund manager should be well-versed in the market. This means he should be knowledgeable about its trends, outcomes, investment bearings. A successful candidate can put together all this wisdom and predict future trends in such a dynamic realm. However, the basic necessity still aims at utilizing the client’s funds wisely and provide a fruitful return on investment.

Eligibility

If one possesses the right skills and qualifications, one can easily become a mutual fund manager by applying the required efforts diligently.  

• Being a graduate is a pre-requisite. An MBA in Finance or CFA/CFP designation is advisable.
• A bachelor’s in economics, accounting, tax, and finance or investment analysis is also equally good whereas a master’s in investments or finance supplements growth.
• One should know about Portfolio Management, with this he/she should be able to guide private investors into making better investment judgments.
• One who is accountable for what he does and why he does that.
• The capacity to work individually as well as within interdisciplinary teams that include investment specialists, data examiners, and software developers.
• A minimum of five years of work experience is mandatory. A good understanding of the fixed income markets adds more value.
• One should have exceptional communication skills, both written and verbal.

Steps To Becoming a Mutual Fund Manager

1. Start Reading: The financial markets are ever-changing, be it global or domestic. One needs to be fresh with updates regarding the current developments in the economy, technology, and politics. Supreme dailies like The Economic Times, The Economist, The Financial Times, Bloomberg, etc. helps you in being notified of the recent developments. Understanding the inter-linkage of the three realms aids in understanding the effect one realm has on the other. The goal is to develop an analytical mindset, now this could be gained by reading the business models of successful corporations.
   
   
2. Track And Follow the Industry: Constantly updating oneself with current developments in various realms that directly affect financial markets bolsters the foundation and knowledge of an individual. Along with this one has to narrow down to follow the investment industry. This involves tracking the stock market shifts and studying the fundamental working of Asset Management companies. Using the social media boom to network with like-minded people supplements exposure to different investment management philosophies. One can connect to the working professionals already in mutual funds. This would help tighten your grip on the ropes of trading. Attending trade fairs, expos, and conferences enhances awareness and broadens the mindset.
   
   
3. Enroll in Internships: Internships help one gain wisdom through the knowledge gained by personal experience. One could do them alongside study and act as a fresh platform to apply relevant, freshly gained skills. 
   
   
4. Narrow Down to Your Niche: The financial world is enormous and brims up with various opportunities in its specific realms. In-depth knowledge of any area increases confidence and provides you with an edge over others.
   
   
5. Take Part In Real World Simulations: The internet offers many games on portfolio Management. Taking part in such games offered by authentic sources like Investopedia, Market Watch, Fitch Learning, etc. helps you understand the basics of asset allocation, principles of diversification, liquidity, and other matters of the secondary market.
   
   
6. Enroll for CFA/ MBA Finance: This accounts for a more serious step in becoming a mutual fund manager. One needs to opt for a CFA or MBA (Finance) in top institutes. The integral module of the portfolio management module in CFA exams provides learning based on real-world situations and case studies. Besides, a global CFA certification stands out.
   
   
7. Study Financial Modeling: It’s better to start early and study Financial Modeling since it is one of the most demanded skills of a mutual fund manager. Funds are invested in equities of stock with higher valuations. Valuation is incomprehensible to someone who doesn’t know the skill of forecasting. This is precisely why such knowledge & skill is in high demand.
   
   
8. Start as an Analyst: To become a mutual fund manager takes prior experience and a healthy knowledge base. The initial days demand working as a mutual fund analyst. During this time, one diligently monitors positions on one or more funds and updates models/investment thesis subsequently, which is subject to any recent development/ knowledge. Once one gets well-versed in analyzing funds, he/she graduates to become a fund manager. Here, one should seek to hedge the more widespread risks of a portfolio.

Salary

Honestly, A Mutual Funds Manager earns well, but the salary package depends on the knowledge base, the appropriate & relevant skills, and prior experience in the field. On average, Mutual fund managers earn about $53.49 an hour, which makes the mutual fund manager’s annual salary $111,254 in America. However, some mutual fund managers earn salaries ranging from $61,000 to $200,000 a year. This signifies that the top-tier mutual fund managers make $139,000 more than the lowest-tier ones.

Skills Required to Become a Mutual Fund Manager

• Confidence: Since one has to deal with management and that too in such a demanding industry of Finance, confidence becomes the utmost priority. This is because one has to communicate ideas and bridge the gap between the company’s policymakers and the marketing workforce.
  
  
• Strong Time Management: The area of mutual funds is highly demanding, often leading to stressful situations. The manager has to look after so many things that he might lose track of what to do and what not to. Hence, companies look for candidates with adequate time management abilities.
  
  
• Analytical and Problem-Solving Skills: You’re surrounded by numbers all the time since you’re working in the financial industry. To analyze fresh developments in the industry and provide quick solutions to pop-up problems is the trait of a successful manager.
  
  
• Communication Skills: The manager works as an umbrella for the employees working under him and the connection channel between the top officials and the general workforce. He is also responsible for authoring columns in newspapers and answers the media officials. It is therefore clear that at every point in a Mutual Funds Manager’s career; he needs to communicate.
  
  
• Team-Working Skills: It is clear by the designation itself, which is that of a manager, that you need to work in teams. It is one of the most basic skills that a person seeking to become a Mutual Funds Manager must have.
  
  
• Documentation Skills: The Mutual Funds Managerial area depends on heavy research and analysis since he/she should make predictions in the current and the forthcoming prospects. This mandates the ability to research and complied with the findings, analysis, and studies for wider reference.
  
  
• IT Skills: The tech-savvy world demands the growing need for cyber educated professionals. The industry expects them to handle the industry prescribed software along with the future scope of learning more software as per the development and demand.

Responsibilities Of a Mutual Fund Manager

• Produce sharp opinions on mutual funds after thorough research. This research measures beyond mere enforcement and calculated risks.
• Conduct analysis both in terms of quality and quantity. One achieves this by operating data archives, examining the regulative reports, and gathering intel from portfolio managers.
• Monitor major advancements in the financial sector, market segment, and the wider economy.
• Draft newspaper columns, articles, and special analysis reports.
• Develop proficiency to understand the mutual fund industry, distinct fund groups, different market divisions, and corporate stewardship issues.
• Represent the mutual fund area by engaging in timely dialogue with the media, regulatory bodies, industrial associations, etc.
• Adhere to the company’s investment policies for suggesting mutual fund investment opportunities to the private or firm investors.
• Understand the long-term investment strategy of the company and communicate the same in tandem with the company’s marketing & support staff and financial advisors. Unifying them towards a common goal.
• Coordinate and collaborate in fund research to recognize suitable investment options and cyclical risks. This allows for the setup of a strong research database that has found recommendations and necessary conclusions.
• To be in sync with the newest trends and developments in the mutual fund industry to maximize investment presence and increase investment profits.

Conclusion

While the Mutual Fund Management field is rewarding, it takes a significant amount of effort at all levels. One needs to progress step by step to reach the managerial position. Consistent efforts and being well-versed in the industry and directly affecting it are the key to achieving this goal. A successfully planned out future pathway to take up this journey proves fruitful and helps after acquiring the position.   

Frequently Asked Questions

• How do Mutual Fund Managers compare to Hedge Fund Managers? Though mutual fund managers earn less, annually than hedge fund managers yet the mutual fund management area is a more stable career.
• What’s the income structure of a Mutual Fund Manager? The income of a Mutual Fund Manager is the total of the salary plus the performance bonus. The variation of the average annual income occurs by the type of financial institution.
• What kind of role do the Fund Managers play? Companies expect Mutual Fund Managers to play a decisive role concerning the performance of the active mutual funds.
• How much does money do Mutual Fund Managers make at Mutual Fund companies? Mutual Fund Managers at Mutual Fund companies make $436,500, on average, as per the survey conducted by Russell Reynolds.
• Is being a Mutual Funds Manager in the United States a simple job? To be a Mutual Funds Manager in the United States is not at all a straightforward job. It’s a highly demanding field that requires continuous updating of skills to remain in the industry.