The advantages of having an investment fund manager

The investment fund manager manages individuals’ wealth to obtain the highest possible returns

Who wouldn’t want to have more money? As Cristina and Los Stop sang, this is one of life’s three most important things. Practically everyone wants to increase their wealth. However, not everyone has the necessary knowledge to achieve it. And for this reason, the figure of the investment fund manager was born.

Investment is not new. People have invested in projects or companies for hundreds of years, trusting in their growth possibilities to obtain an economic return in exchange. Little by little, this activity became official, giving rise to events such as the establishment of the first stock exchange in Amsterdam in 1602.

At the same time, however, the emergence of these investment channels led to a certain exclusion from the financial system of all those who lacked knowledge of the subject. Today, the complex terminology and difficulty accessing some instruments mean that many citizens may feel this world is something distant.

When, in reality, everyone has a place.

What is an investment fund manager?

What does an investment fund manager consist of? This figure was created to connect people with the financial system. Thanks to this, they can participate and multiply their capital; it is a kind of link. As such, they must be an expert in the field.

The investment fund manager is professionally engaged in managing the money that individuals deposit in the funds with one objective: to maximize profits. How? By making investment decisions. That is, by choosing the assets in which it is most advisable to inject the money.

This task requires a deep knowledge of the financial scenario and investment mechanisms. Not only must they be fluent and comfortable in the stock market, but they must also understand how all the available products work. Investment funds spread capital across different assets, so you need to know when and how to acquire government bonds and be aware of alternative financing channels, such as crowdlending or crowdfactoring.

But his tasks go beyond mere investment. Another of their tasks is, for example, to prepare reports to update individuals on the evolution of their assets, to inform them of their rights and obligations as participants, or to warn them of any possible changes in the conditions.

In addition, they must provide the fund’s clients with the DFI (or key investor information document). A record of vital importance that is analyzed by the National Commission of Markets and Securities and in which all relevant information is included, such as the historical profitability of the fund, the risk profile, the current expenses, the commissions, etc.

On the other hand, to perform your duties as an investment fund manager optimally, you must possess negotiation and communication skills, the ability to evaluate and analyze data, handle different languages, and be aware of how national and international news can affect the state of investments.

The investment fund manager must have a thorough knowledge of the financial system

Understanding investment funds

It is not possible to understand what a investment fund manager is without understanding, in turn, what investment funds are. One of the most popular financial products today, mutual funds, are relatively simple to operate.

Investment funds bring together the individual holdings of a group of people. After pooling all the money, it is invested in different assets, always keeping in mind the demands of each participant. Thanks to this mechanism, many citizens can benefit from the profits derived from products in which it would have been more challenging to invest individually.

Each individual contributes the amount that they can or consider appropriate and will receive the benefits that correspond to them proportionally. The more you invest, the higher the returns can be. But there is also the risk of losing some money since, like most investment products, funds are not risk-free.

Ultimately, the investor’s profits depend on the manager’s good or bad management. For this reason, it is essential to thoroughly investigate the investment fund manager, checking his performance and previous experience. This is why many choose to use firms specializing in this activity: investment fund managers.

How do I know if I need an investment fund manager?

This figure is of great help to all people with little knowledge of the financial world who can delegate the management of their investments to a professional and trust that he will manage them in the best way.

This does not imply the loss of control at any time since investment decisions will always be motivated by the client’s interests, which must be communicated to the investment fund manager.

If the investor’s profile is more conservative, the manager will choose to acquire products with a low level of risk, such as fixed-income products, even if the returns are not very high. On the other hand, if the client has a riskier profile and prioritizes profit, the investment fund manager will include products with higher risk and lower liquidity in his investment portfolio since assets of this nature tend to provide higher returns.

In both cases, a return objective is usually pursued over a given period of time, developing the most appropriate investment strategy to achieve it.

However, many savers prefer to refrain from delegating their investments and perform this task themselves. This implies a more profound knowledge of the financial system and the products that can be acquired. In addition, the investor has to allocate a greater amount of time since they will have to review the status of their investments continuously. But, at the same time, the level of autonomy will be much more considerable.

Along these lines, the development of new alternative financing channels has contributed to democratizing individuals’ access to the financial environment. Many online platforms offer products that are easy to understand, in which it is possible to invest with a cell phone from home in a fast and secure way.

This is the case of Inversa Invoice Market, a marketplace based on the advance of invoices in which it is possible to obtain very substantial returns in short periods of time. And all this without the intermediation of an investment fund manager.

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