How do I Choose the Best Fund Management Company?

Finding the best fund management company requires the evaluation of several factors: the reputation of the fund manager, whether your investments are short- or long-term, whether you need a conservative, aggressive, or median strategy, and whether the fund manager fully understands your investment needs. Getting the most out of your fund management company begins with an honest assessment of your own situation and with your investment goals.

The track record of the fund manager is the primary consideration in selecting a fund management company. Make sure that the record and reputation of a fund manager reflect the type of management you need. A fund manager that specializes in the oversight of funds designed for retirees is of little use to an investor looking for more immediate returns. Every fund manager has his own area of expertise, and these areas are not usually interchangeable.

Strategy is crucial to the success of an investment fund. Even for investors seeking a long-term investment, consideration must be given to what the investment is in and how it is made. A long-term position is more than simply investing in a set of funds and leaving the money there to grow or shrink with the fluctuation of the market. A fund management company often makes as many, if not more, trades for long-term investments than for short-term ones. Make sure that your fund manager has a track record of managing the type of strategy that best suits your goals.

The mastery of timing in the investment field is its most important and, often, most overlooked aspect. More than anything, timing is often the final arbiter between large gains and heavy losses. When searching for a fund management company, look for a consistent track record of preemptive moves that have warded off significant loss. While past success means little in the way of future expectations, the ability of a fund manager to consistently foresee possible stumbling blocks before they occur is a hallmark of a firm with a sound investment strategy.

Do not put all of your investments under the purview of a single fund management company. Just as a fund manager must diversify in order to reap a stable rate of return, as an investor, you must diversify your holdings beyond one firm. Even the best fund managers falter, and one bad day can lead to significant losses if all of your investments are managed by the same company.