What are fund managers?

Discover the main characteristics and how this type of entity works.
A good way to make a return on your money is to invest in financial and savings products, such as investment funds or pension funds. However, not everyone has the experience, time or knowledge needed to select the products that are best suited to their expectations, needs and, above all, their investor profile. In this sense, fund managers provide vital help to investors who are not experts in the field of finance. Find out how these entities work and what they can do to help you make the most of your savings.
Upper banner calculate returns Upper banner calculate returns
Takes out party to your money
Choose the best investment fund for your needs.

How a fund manager works

Fund managers, also known as investment or asset managers, are companies that are tasked with managing the money of third parties on their behalf, by adhering to various investment strategies specified in advance. Their main advantage is that they allow small investors to pool their money with others in order to access more profitable investment options that are beyond the reach of small, individual investors. Fund managers are also responsible for finding and selecting the financial assets that best suit the needs of their customers, and for defining and implementing the investment strategy.

The management companies are responsible for communicating with the companies they invest in to learn about their strategy and report back to their customers, who are the end investors. Similarly, the managers represent the investment fund participants in the decision-making of companies and vote for them at shareholders' meetings.

Investment funds don't have to focus on a single class of financial assets; instead, they can offer diversified portfolios that include different types of products, such as fixed-income assets, equities, deposits, derivatives, etc.

Transparency and security

In addition to the basic functions of advising customers and acquiring and managing the financial assets, fund managers are also required to keep shareholders informed at all times about the fund, its operations, and any changes that may be implemented. In fact, the professional conduct of these companies is subject to strict regulations supervised by the Comisión Nacional del Mercado de Valores, which is the agency that guarantees transparency and ensures the interests of investors. 

The first information that customers are required to receive from investment managers is a document that gathers and defines all the characteristics of the fund in question. Potential investors can therefore have all the information they need to evaluate and decide whether or not they want to invest in the shares of said fund. These information documents are reviewed by the CNMV, which also makes them available to the general public on its website. In addition to this initial information, once the customer decides to invest in the fund, the manager will also be responsible for providing investors with quarterly reports that accurately reflect the transactions carried out on their behalf. Finally, all the investors also receive an annual report that is required to indicate the return of the fund and any changes in its holdings.

Advantages of managers

One of the main advantages of fund managers is that they have the information and expertise that allow them to offer personalized advice based on the investor's goals and needs and to make the most profitable decisions on their behalf. The managers conduct detailed analyses of the projects and companies they plan to invest in so as to have the highest confidence in the profitability of their operations, and they are able to analyze very complex factors, something that is beyond the skill of the average investor. 

In this sense, fund managers also save time for their customers, who don't have to spend time searching for information and analyzing complex financial reports: once an investment fund is selected, the investors need only study the periodic reports prepared by the management company to stay up to date on the status of their investments.

Central banner Central banner
Fund Finder
Discover the BBVA investment fund catalog.

An additional advantage of fund managers is their independence from the fund depositories. In fact, the fund managers are solely responsible for administering the fund's assets and for making all related decisions, while their customers can rest easy knowing that the fund's securities and assets are deposited in an independent entity that monitors the operation of the management company, and is in turn supervised by the CNMV. This division of functions between the depository company and the management company, together with the ongoing supervision of both by the CNMV, provides dual oversight and transparency when it comes to ensuring the capital of the investors, even if it remains subject to the risks arising from the investment decisions. 

Making the right investment decisions can yield great benefits. Investors who lack specialized knowledge would be highly advised to place their trust in fund managers or banks, and delegate any investment decisions to them. And so we invite you to get to know BBVA Asset Management, the management firm of the investment funds and pension plans of the BBVA Group Its efforts are recognized by numerous experts, as was demonstrated at the 30th edition of the Expansión-Allfunds Awards, where it received three awards (Best Asset Allocation Fund Manager, Best Pension Manager and Best Aggressive Multiasset Pension Fund).

CTA subhome funds CTA subhome funds
Investment funds - You might also be interested in Investment funds - You might also be interested in

You might also be interested in

  • Learn about the characteristics, types and description of what we know as financial assets.
  • We'll explain how investment funds work and everything you need to know about investing your money.
  • Reduced risk and known, guaranteed returns are two of the characteristics of a fixed-income investment.
Investment funds - Tools Investment funds - Tools

Investment fund tools

  • The BBVA investment fund calculator helps you to find out the returns you can get with your savings.
  • You don't know which investment fund best suits your needs? Our comparison tool will help you choose the best option.
  • Find the best investment fund in which to invest your savings and start to get a return on your money.
  • Calculate the returns of an investment quickly and easily using the calculator we provide you.