What is AMC (Asset Management Company)

What is AMC?

By admin_mutual | Jan 10, 2023

AMCs or Asset Management Companies are businesses that pool money from different institutional and retail investors and invest it in a variety of securities. The company uses the money to buy capital assets like stocks, bonds, and other types of property. The research team chooses the appropriate securities, and the AMCs employ professionals known as fund managers to manage the investments.

If you do not understand the way stock markets tend to operate, it is always a good idea to have a financial expert manage your money. An AMC or mutual funds house enters the picture at this point. Asset management firms make investments on behalf of their clients using a pooled capital fund. The money is invested in various projects across a range of asset classes.

Companies that manage assets are also known as money management firms or money managers. The reputation of an AMC in the market is crucial to consider when choosing a fund for investment. Investors have faith in funds managed by reputable and well-known AMCs. An AMC adheres to a detailed process in order to grow its base of investors and provide quality returns.

AMCs must defend their investment choices in front of their investors and trustees. For this, a periodic evaluation of fund performance is carried out while taking asset allocation, NAV Value, fund returns etc. into account. All AMC investors and trustees have access to this review sheet.

AMCs operate under the direction of a trustee board. However, they must answer to the Securities and Exchange Board of India or SEBI, which oversees the country’s capital markets. When you invest in an AMC, you are essentially investing in a fund that is managed by the AMC. The fund returns are linked to the market, and so they are based on how well the fund has performed. The likelihood of a well-managed fund producing relatively higher returns is high.

The fund would demand a small fee known as a fund management fee in exchange. It is the AMC’s main source of generating income. To maximize its subscriber base and, consequently, the revenue, a fund is anticipated to produce returns that are competitive in its category.

There are many different types of asset management companies, including:

  • Private Equity Funds
  • Exchange-Traded Funds
  • Mutual Funds
  • Hedge Funds
  • Indexed funds

Securities and Exchange of India or SEBI, the capital market regulator, oversees Asset Management Companies as well. In order to safeguard investors’ interests, AMCs are also controlled passively by the AMFI (Association of Mutual Fund of India).


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