Tier 1 Signals work with various fund managers globally. Below you will see what are the duties and workings of a fund manager and how Tier 1 Signals work with fund managers through their outsourcing and oversights.
Growth and Performance
People turn to funds because they want growth. Fund managers can only deliver it by putting clients’ money to work, so they have to decide where to invest. Their choices are shaped not only by the rules and regulations applicable to the fund, but also by clients’ expectations. Fund managers are judged by how well their fund performs. At a minimum, they need to deliver growth that exceeds interest rates and the rate of inflation to justify the risks of investing.
Fund managers have a responsibility to protect investors’ money. Prudent investors are aware that funds must take some risks to deliver growth but they do not expect reckless behavior. Therefore, fund managers’ choices to buy or sell assets are preceded by a lot of research and due diligence, which can involve investigating companies or assets, attending industry events and employing risk management techniques to assess investments. Fund managers also address risk by ensuring asset portfolios are sufficiently diversified.
Hiring, Outsourcing and Oversight
With so many responsibilities, fund managers need help. Many hire and oversee staffs and some outsource certain duties to other professionals and firms. This allows the managers to pass along tasks such as negotiating with brokers, attracting capital or issuing proxies and annual reports. By outsourcing, fund managers can shift some regulatory responsibility to third parties, but ultimately they are still responsible for the outcome of their funds so they must actively manage more than just the fund’s investments.