An Asset Management Company (AMC) is a financial firm that manages investment portfolios on behalf of clients. AMCs are responsible for overseeing the investment decisions for mutual funds, exchange-traded funds (ETFs), and other types of investment vehicles. They may also manage portfolios of individual securities on behalf of high net worth individuals or institutional clients.
AMCs typically employ professional money managers who are responsible for researching and selecting the securities that are included in the investment portfolios they manage. AMCs also handle the administrative and operational aspects of managing these portfolios, such as calculating net asset values (NAVs), calculating dividends and capital gains, and issuing and redeeming shares.
AMCs are regulated by financial industry regulatory authorities, such as the Securities and Exchange Commission (SEC) in the United States. Investors should be aware that AMCs charge fees for their services, which can affect the overall performance of the investments they manage. It’s important for investors to carefully consider these fees when evaluating the suitability of an AMC’s investment products.
How an AMC is setup in India?
An asset management company (AMC) is typically set up as a separate legal entity, such as a corporation or limited liability company (LLC). The AMC will typically have a board of directors or managing partners who are responsible for overseeing the company’s operations and making strategic decisions.
The AMC will also have a management team, which may include professional money managers who are responsible for research and investment decision-making. The AMC may also have other employees who handle administrative and operational tasks, such as calculating net asset values (NAVs), issuing and redeeming shares, and processing trades.
In order to conduct business as an AMC, the company must obtain any necessary licenses and registrations, such as a broker-dealer license if it plans to trade securities on behalf of its clients. The AMC must also comply with regulatory requirements, such as those set by the Securities and Exchange Commission (SEC) in the United States.
AMCs may be set up by financial institutions, such as banks or insurance companies, or they may be independent entities. Some AMCs are publicly traded companies, while others are privately held.