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ETF Dictionary

Fund Manager

Explaining the Term “Fund Manager” and the Role of the Fund Management Company

1. Who is a Fund Manager? 

  • A Fund Manager, also known as a Fund Management Company (FMC), is an established organization tasked with managing funds registered with the Vietnam Securities Depository (VSD). The Fund Manager is a professional entity responsible for managing, developing, and operating investment funds. These funds can be mutual funds, pension funds, or ETFs (Exchange-Traded Funds). The fund management company collects capital from investors through the issuance of fund units and then invests in various assets such as stocks, bonds, and other financial instruments.

2. Roles of the Fund Manager (Fund Management Company)

1. Building Investment Strategy:

The Fund Manager is responsible for constructing the investment strategy of ETFs, defining profit objectives, determining asset allocation ratios, and establishing specific investment rules. This strategy is often based on in-depth insights into the financial market and specific economic situations in Vietnam.

2. Developing Funds and Managing Investment Portfolios:

Fund Managers collaborate with financial partners (securities companies, banks, AP, etc.) to develop new ETFs. They are responsible for selecting and managing the investment portfolios of the funds. After ETF units are created, the Fund Manager makes trading decisions to optimize profits from the investment portfolio.

3. Optimizing Profits and Risk Management:

Fund Managers assess and manage risks to ensure the stability of the fund. Flexibility in adjusting strategies helps maintain accurate reflections of market trends, minimize risks, and optimize profits. Financial markets are constantly changing, and Fund Managers play a crucial role in adjusting strategies to respond to market volatility.

Therefore, a Fund Manager is not only the manager of investment portfolios but also the decision-maker crucial for the development of ETFs in Vietnam.

 

>> What are ETFs and the benefits of investing in ETFs?

  • The Exchange-Traded Fund (ETF) is a type of investment fund listed on the stock exchange, similar to stocks. ETFs are designed to track a specific index in the stock market. Below are some benefits of investing in ETFs:
    1. 1. Diversification of Investments: ETFs allow investors to participate in various types of assets, helping diversify investment portfolios, reduce risks, and increase profit opportunities.
    2. 2. Low Costs: Compared to some other investment products, ETFs often have low management fees, helping investors save costs and increase return on investment.
    3. 3. Transparency: By tracking a specific index, ETFs provide transparency and help investors better understand the composition of the portfolio they are investing in.
    4. 4 Time and Effort Savings: Investors do not need to monitor and manage each stock in the portfolio. ETFs automatically adjust to the index, reducing the time spent researching the market and managing investments for investors.
    5. 5. Convenience in Trading: Being listed on the stock exchange, buying and selling ETF shares is similar to trading stocks. Investors can trade ETF shares at any time during market hours.

 

  

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Please note that investing always comes with risks, and investors should conduct thorough research before deciding to invest in any type of fund or asset.

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