An Asset Management Company (AMC), or fund house, invests money pooled from individual investors directly into various financial instruments like equity, debt, bonds, and real estate. A fund house, or an AMC, employs experienced and professional fund managers who invest on behalf of individual investors and create returns for them. The cumulative amount that is pooled in from all individual investors is known as the AUM or Assets Under Management. A growth in AUM signifies trust in the fund.
Role of AMC in Mutual Fund
The primary role of a fund house in mutual fund investment is to decide the time and manner of investment on behalf of their clients. An AMC understands the financial goals and risk appetite of an investor and manages their assets accordingly to meet the goals.
How to Choose a Fund House
The amount of Assets Under Management of a fund house is one of the most important factors that you must consider when choosing a fund house. Next, check the credibility and credentials of the fund manager who will be managing your assets. Finally, make sure you check and understand the historical performance of the fund and whether the vision is aligned with your purpose.
Who Regulates AMCs?
The Securities and Exchange Board of India (SEBI) is the country’s capital market regulator and every AMC is answerable to SEBI. SEBI was established back in 1988 and gained regulatory powers with the Securities and Exchange Board of India Act 1992. A board of trustees at Asset Management Companies ensure regulatory compliance to help govern the industry practices at the fund house.