Asset Management Company - List of AMC Mutual Funds in India | Angel One (2024)

Simply put, an Asset Management Company (AMC) manages the funds ofindividuals and companies. They invest funds pooled from individualinvestors in various securities to generate optimal returns.

An AMC helps investors to invest in diversified portfolios ranging fromhigh to low-risk securities, like stocks, debentures, bonds, realestate, etc. They employ seasoned and experienced professionals todesign investment schemes, taking into consideration various risks suchas market risks, industry risks, return risks, and political risks tomeet return targets on investment.

AMCs in India invest pooled funds in different asset classes to meet thefinancial objectives of their clients. A debt fund will invest inlow-risk bonds and low-risk debt securities, while an equity fundinvests in stocks and targets higher returns by investing in stocks.

As of October 2023, there are 45 asset management companies of varioussizes registered in India. Recently, the popularity of AMC mutual fundsincreased significantly, which boosted the total assets under managementor AUM of these companies. AMCs in India recorded 5x growth in total AUMfrom February 2012 to February 2022.

An asset management company manages the funds of its investors againstfees. So basically, when you invest in AMC mutual funds, you invest in aportfolio offered by the AMC company.

The AMC company invests the corpus in different securities to generatereturns matching the objective of the fund. The AMC company accomplishesthe task by adopting the following measures.

Market research

AMC companies in India depend heavily on market research to studycurrent trends, macro and micro economic factors, and political aspectsto select investment securities. They also dive deep into the investmentrequirements of investors and personal finance needs to designinvestment schemes.

AMC mutual funds engage the services of fund managers and research teamsto choose the best investment options from the market.

Asset allocation

An important role of an asset management company is to allocate theasset to various asset groups. The company will distribute the capitaldepending on whether the scheme is a debt or an equity fund.

Creating portfolios

Depending on the market findings and theme of the fund, the fund managercreates portfolios of securities. In the case of AMC mutual funds, theasset managers make decisions on which securities to purchase or sell,backed by the research done by the internal team.

Tracking performance

Monitoring portfolio performance is one of the primary roles of fundmanagers.

Asset managers provide regular updates on the fund's performance withregards to buys and sell, repurchases, NAV, return on risk, andportfolio changes which will impact the performance of your investor.

The AMC companies perform the role of mediators. Their primary task isto invest funds collected from investors into different securities togenerate returns. The profit earned gets distributed among allinvestors. The AMC mutual funds operate in a regulated market whichhelps maintain a high degree of transparency and authenticity. It makesmutual fund investment a safe option for small investors.

Investing in mutual funds offers several benefits.

• Access to a diversified investment portfolio. The fund deposited isinvested in various securities.
• It allows investors to earn decent returns without directlyparticipating in the market.
• Investors can enter or exit at their convenience.
• One doesn’t have to open special accounts to invest in AMC mutualfunds.

Choosing a fund house for your investments is a critical decision thatcan significantly impact your financial goals. Here are four keypointers to consider when making this choice:

1. Performance Track Record: Examine the fund house'shistorical performance across various funds. Look for consistency indelivering returns and compare their performance against relevantbenchmarks. A solid track record suggests a capable management team.
2. Investment Philosophy:Understand the fund house's investment philosophy and strategy. Ensureit aligns with your risk tolerance and investment goals. A fund housewith a transparent and disciplined approach is preferable.
3. Fund Diversification: Assess the fund house'svarious funds. Diversification allows you to create a well-roundedportfolio. A fund house with a wide range of options providesflexibility for your investment needs.
4. Costs and Fees: Consider the expense ratios and feesassociated with the funds. Lower expenses can significantly impactyour overall returns over time. Look for a fund house that offerscompetitive costs.
5. Reputation and Credibility: Research the reputationand credibility of the fund house. Check for any regulatory orcompliance issues. A well-established and reputable fund house is morelikely to safeguard your investments.

Asset Management Companies (AMCs) in India are under the supervision oftwo primary regulatory entities:

1. Securities and Exchange Board of India (SEBI): SEBIplays the role of regulating and overseeing the operations of allmutual funds companies in India.
2. Association of Mutual Funds in India (AMFI): AMFI is a statutory body created by SEBI-registered mutual fundcompanies, and its main aim is to promote transparency and ethicalpractices within the financial industry.

All mutual fund companies are required to adhere to AMFI's regulations.Furthermore, in the case of banks that act as sponsors, they are subjectto regulation by the Reserve Bank of India (RBI), in addition to SEBIand AMFI. It's worth noting that the RBI serves as the overarchingauthority that governs these regulatory bodies, including SEBI and AMFI.

Mutual fund companies are subject to stringent regulations by SEBI,AMFI, and RBI. These guidelines ensure transparency and ethical conductin the industry. Key provisions include:

1. The Chairman of an AMC cannot simultaneously serve as a Trustee of anymutual fund.
2. Key personnel must maintain a clean record without involvement infraudulent or offensive activities.
3. AMCs cannot assume the role of a Trustee for a mutual fund.
4. AMCs must maintain a minimum net worth of ₹10 crore.
5. Disclosure of investment intentions in offer documents is mandatory.
6. Quarterly reports detailing regulatory compliance must be submitted totrustees.

Many wonder whether mutual funds are as safe as traditional bankaccounts or the investment schemes offered by banks. A common fear isthat mutual fund companies might suddenly shut down or mismanage thefunds, leaving investors in a lurch. The confidence in banks often comesfrom their regulation by the Reserve Bank of India (RBI), which providesa sense of security.

However, what often gets overlooked is that mutual funds are regulatedby the Securities and Exchange Board of India (SEBI), the capital marketregulator. Additionally, the Association of Mutual Funds in India (AMFI)plays a crucial role in educating investors and safeguarding theirinterests.

Here's how the system is structured to ensure safety and transparency inmutual fund operations:

1. Sponsor and AMC: A sponsor establishes an AMC underthe Companies Act, of 1956. The AMC charges a fee for its services andoperates under the supervision of trustees.
2. Trustees: The trustees who oversee the operations of the AMC are themselvesregulated by SEBI. This ensures that there is an extra layer ofsupervision to protect investors' interests.

This regulatory framework is designed to provide objectivity andtransparency in the functioning of AMCs, giving investors peace of mind.

Angel One offers a diverse range of mutual fund direct plans, with over1,000 schemes to choose from. Explore these options and make informedinvestment decisions with Angel One today!

Final words

All asset management companies in India are regulated by AMFI and needto follow government guidelines to invest in the market, which makes AMCcompanies safe for investing. Over the years, mutual funds have emergedas an excellent investment option with flexible investment options,compounding returns, and rupee cost averaging.