Manager of managers investment: Difference between revisions
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A '''"manager of managers fund"''' ('''MoM fund''') (MoM fund) is an [[collective investment scheme|investment fund]] that uses an investment strategy of directly selecting different investment managers and gives them mandate to make investment decisions. This is different from the traditional mutual fund where only one manager invests the fund capital in shares, bonds or other investment vehicles. MoM fund is one type of [[multi-manager investment]]. The other type is [[fund of funds |
A '''"manager of managers fund"''' ('''MoM fund''') (MoM fund) is an [[collective investment scheme|investment fund]] that uses an investment strategy of directly selecting different investment managers and gives them mandate to make investment decisions. This is different from the traditional mutual fund where only one manager invests the fund capital in shares, bonds or other investment vehicles. MoM fund is one type of [[multi-manager investment]]. The other type is [[fund of funds ]]. |
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The assumption underpinning MoM is that diversification and balance can be achieved more readily by having group specialists to invest the fund capital instead of just one individual. This means that the role of the manager of managers is to assemble a group of investment experts, closely monitor their performance, and has the option to alter the composition of the team to adapt to market conditions or fund performance. For example, the manager of a large pension fund would appoint different investment managers for different asset class such as equity, bond, and commodity. The performance of those managers will then be measured against a [[benchmarks]], and replacement may be necessary to maintain the fund’s overall performance and risk control measures. |
The assumption underpinning MoM is that diversification and balance can be achieved more readily by having group specialists to invest the fund capital instead of just one individual. This means that the role of the manager of managers is to assemble a group of investment experts, closely monitor their performance, and has the option to alter the composition of the team to adapt to market conditions or fund performance. For example, the manager of a large pension fund would appoint different investment managers for different asset class such as equity, bond, and commodity. The performance of those managers will then be measured against a [[benchmarks]], and replacement may be necessary to maintain the fund’s overall performance and risk control measures. |
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Revision as of 06:38, 1 March 2007
A "manager of managers fund" (MoM fund) (MoM fund) is an investment fund that uses an investment strategy of directly selecting different investment managers and gives them mandate to make investment decisions. This is different from the traditional mutual fund where only one manager invests the fund capital in shares, bonds or other investment vehicles. MoM fund is one type of multi-manager investment. The other type is fund of funds .
The assumption underpinning MoM is that diversification and balance can be achieved more readily by having group specialists to invest the fund capital instead of just one individual. This means that the role of the manager of managers is to assemble a group of investment experts, closely monitor their performance, and has the option to alter the composition of the team to adapt to market conditions or fund performance. For example, the manager of a large pension fund would appoint different investment managers for different asset class such as equity, bond, and commodity. The performance of those managers will then be measured against a benchmarks, and replacement may be necessary to maintain the fund’s overall performance and risk control measures.