- Dr. Sanjay Tiwari
One of the most important instruments of investment through stock market is the mutual funds. The companies or organisations which facilitate this type of investment are known as Asset Management Companies (AMCs). These AMCs are responsible for the investment made by investors and thereby MF agents are the key channels for apprising the large number of investors of options for investment. MF’s agents, distributors, bank employees handling Mutual Fund marketing have to be informed fund advisors. The following is the detail of career positions available in MF segment:
Fund Managers are the people or experts who are responsible for managing the Asset Under Management (AUM) of any AMC which is contributed by the heavy amount of investment in equity and debt market. They not only manage the investment but also provide advice to their clients who may be institutional or individual. They have the responsibility to track the market returns and give good returns to their clients who have shown confidence in their expertise. Simultaneously they keep on changing their capital structure i.e. debt-equity mix for balanced investment decisions. The criteria for becoming fund manager depends upon the professional degree like MBA in finance and more important the inclination towards Mutual Fund risk-return analysis.
Distributors are appointed by the AMCs who educate the investor sufficiently. Individuals form the largest segment in the distribution category. They perform the role of marketing distribution channels and facilitate individuals to purchase some funds.
Lead Managers are the functionaries who co-ordinate with intermediaries, campaign for the scheme and approach potential investors. Expert professionals having exposure to risk-return conceptual knowledge and practical skills are employed by these organisations.
Dealers execute trades and act as intermediaries between the investors and the equity/debt markets. The dealers have to comply with all the formalities of sale and purchase. A person with a financial background, thorough understanding of stock market operations, communication skills and acumen can be a dealer.
Operations related career in stock market
There are some other positions available in stock market and its operations. These may be categorised into the fund accounting group, the custody group, the financial control group and the MIS & audit group.
The fund accounting group calculates Net Asset Value of funds on a daily basis and maintains books. The custody group make a liaison with custodians appointed by the AMC. MFs buy and sell huge volumes of securities. The custodians appointed ensure the safe custody of these funds and ready availability. Therefore, the people are required to run these day to day operational activities. The skills, inclination and professional qualifications are desired.
Registrar and transfer agents process the applications and dispatch Unit certificates to unit holders within the Security & Exchange Board of India specified time-frames.
Career with Regulatory Bodies, Rating Agencies and Depositories
To regulate the capital market SEBI (Securities and Exchange Board of India) was constituted in 1992. As a regulator of stock market, mutual funds and derivative, this body has expanded its business and operation which require professionals from varied backgrounds; finance, accounting, auditing, investment, credit rating, consultancy, mutual funds, law, derivatives products etc. IRDA as a regulator of insurance business in India requires some investment experts for their valuable advises based on sound analysis of investment of their insurance products. With the opening up of the insurance sector, private and foreign players have emerged on Indian insurance scene which also provides ample opportunities for professionals associated with investment management profession.
Similarly, to advise the individual investors on their investment related to equity and debt based on respective ratings of the financial instruments, various credit rating agencies have been formed i.e. CRISIL, CARE, ICRA which are always in need of professionals in investment analysis such as; credit analysis, rating analysis, industry analysis, portfolio analysis, economic analysis etc. CRISIL has started courses in financial planning for professionals.
Career in Depositories
Depositories are the organisations responsible for recording, maintaining, authenticating and facilitating paperless trading of financial securities. These also act as clearing houses and provide services related to DMAT account and transactions clearance. Some of the depositories working in India are; National Securities Depositories Ltd. (NSDL), Central Depositories Services Ltd. (CDSL) and Stock Holding Corporation of India (SHCIL). For running the business operations of these depositories CA/ICWAI/CS/CFA/MBA with some experience in stock exchanges, custodians, brokerage firms, banks and financial services companies from reputed institutes/universities are required.
Research and Consultancy
Investment firms and institutions differ in the number of professionals they employ in the research and consultancy departments. Equity research can be a one man outfit or a department with a team of professionals drawn from diverse disciplines. Mutual Funds, FIIs, institutional investors, broking houses hire research specialists. Print and electronic media also offer opportunities for professionals’ expert advice on stock investment and volatility.
The following academic and personal prerequisites are essential to seek a career in investment management:
. Degree/diploma/course in investment management/stock market operations
. Knowledge of finance, business, mathematics, accounting, economics, computers
. Analytical ability and communication skills of expected standard
. Acumen, interest and inclination towards investment market
. Knowledge of financial institutions, tax, financial planning, legal aspects of capital market
. Creative ability to take decisions based on sound analysis
. Zeal to learn latest development with persuasive traits and patience.
Now let’s have a look at some intuitions offering programmes/courses in investment management:
Name of the Programme/Course : MBA/PGDM/PGDBA with finance specialisation
Institutions/Universities : IIMs, Universities (Central and State)/Institutions
Duration : Two Years
Eligibility : Graduation with 50% with valid score in CAT/MAT/Test conducted by universities
Address : Website of related institutions
Name of the Programme/Course : Courses and NCFM modules on stock market operations, surveillance, dealers’, derivatives, currency derivatives, investment analysis and portfolio management, depository operations etc.
Institutions/Universities : National Stock Exchange of India, Mumbai
Duration : Depending upon the course/module
Eligibility : Depending upon the course/module
Address : nse- india.org
Name of the Programme/Course : Post-graduate membership course in capital market and financial services.
Institutions/Universities : Institute of Company Secretaries of India, New Delhi
Duration : —
Eligibility : —
Address : Institute of Company Secretaries of India, New Delhi.
Now let us understand the terminology used in this article:
It is the amount invested in some financial asset i.e. equity and debt to get some return at a given level of risk.
It is the study of analysing risk and return on investment using analytical techniques.
The relative performance given in terms of grade to the financial asset depending upon the risk. Credit rating agencies determine a set of criteria for rating the instruments on their safety and advise the investors accordingly.
The probability of getting return from investment in financial asset.
Evaluation of the performance of industry based on certain parameters.
Analysing the risk-return profile of a group of securities. It is done to minimize the risk and neutralize its impact on other securities.
It stands for Exchange Traded Funds. A popular financial instrument whose trading is done through stock exchanges. Gold ETFs are instruments whose value depends upon the gold prices and these can be easily traded through exchanges.
(The author is Associate Professor (Management), Central University of Haryana, Mahendergargh