Mutual Fund and Brokerage

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Introduction

Industry Overview

Asset Management Business: A Primer

What do you do if all you want to deal is in money and the people who make money (at least in the bull run), want to meet CEOs of large listed companies on a regular basis and thinking about becoming the next Peter Lynch out of India: join the business of managing money i.e. Asset Management.

Asset Managers are the professionals who manage your portfolio investments in mutual funds. Broadly, Asset Managers' role is to convert mass-savings in to profitable investments. Typically asset management is used in a more restrictive sense of investing in securities and instruments that are issued in either Money Market or in Capital Market. In larger sense, it can also be used for investments in currently non-tradable securities, however expected to become tradable sometime in future, such as Venture Capital. The asset manager's role is specified by the investment objectives which he or she seeks to achieve by investing in a variety of instruments. Generic categories invested in are obviously Debt and Equity. However based on two factors, duration and uncertainty or risk, each of these could be segmented in to several types such as call money, short-term debt, government debt, corporate debt, defensive shares, aggressive shares, convertibles etc.

The industry consists of several participants such as investment bankis, brokerages, mutual funds, insurance companies and commercial banks. These different outfits provide different roles and opportunities to the interested professionals. Mutual Funds are the firms that are of central importance in this whole scheme, while Brokerages are the exchange-registered firms that are authorised to buy and sell securities on the behalf of these funds. Investment Banking is a profession in its own right, and is of peripheral interest in talking about Asset Management. Investment Banks play a role in origination of fresh securities, acting as intermediaries both, in private placements deals as well as in IPOs. Banks and Insurance companies also invest in various asset classes, as a part of asset-liability matching exercise.

The firms that play the most active roles in securities business are Brokerages and Mutual Funds. Typical roles that exist in the business are in Sales/Dealing, Research and Portfolio Management. The former two are found in Broking, while all the three are found in a Mutual Fund.

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Introduction | Sweet - The Pros | N' Sour - The Cons |  
Employment Tips | Corporate Recruiters