GROUP NAME: BUDDING FINANCIAL WIZARDS

TOPIC: FUND MANAGEMENT

GROUP MEMBERS: ANSHUL JAIN (129, C), ADITI AHUJA (63, B), AARISH MADAN (2 , A)

SUBMITTED TO: MR. GURDEEPAK SINGH

INTRODUCTION:

Funds Management

What Does Funds Management Mean?

Management of net funds available for investment and external funds purchased from other banks. Funds management attempts to match the cash flow needs of a bank against maturity schedules of its deposits as loan demand increases or decreases. Funds management is more of a Treasury function than Asset-Liability Management, which deals mainly with control of interest rate risk and liquidity risk, and the pricing of loans in specific time periods Funds management examines the mix of funds raised by a bank, including large dollar deposits, no deposit borrowings, and credit advances from a Federal Reserve Bank or Federal Home Loan Bank. Its aim is supplying funds sufficient to meet the bank's asset growth objectives at the lowest funding cost, and at acceptable levels of risk (credit risk, liquidity risk, and interest rate risk).On the asset side of the balance sheet, funds management deals with the control of discretionary portfolios by the corporate treasurer, including the investment securities portfolio and trading account assets. On the liability side, it focuses on wholesale sources of funds, including credit advances from a Federal Reserve Bank or Federal Home Loan Bank, and hedging techniques, such as interest rate futures and interest rate swaps to control these balance sheet exposures. Also called balance sheet management.

Discussion

Investment Objective

The financial goal or goals of an investor. An investor may wish to maximize current income, maximize capital gains, or set a middle course of current income with some appreciation of capital. Defining investment objectives helps to determine the investments an individual should select.

"Asset management may be defined as a comprehensive and structured approach to the long term management of assets as tools for the efficient and effective delivery of community benefits. The emphasis is on the assets being a means to an end, not an end in themselves." (Austrians’ 1997 Strategy for Improving asset management practice “A systematic process of effectively maintaining, upgrading and operating assets, combining engineering principles with sound business practice and economic rationale, and providing the tools to facilitate a more organized and flexible approach to making decisions necessary to achieve the public's expectations."

The main streams in asset management are:

Identification of need for the asset, in the light of community requirements provision of the asset, including its ongoing maintenance and rehabilitation to suit continuing needs operation of the asset

Disposal of the asset when the need no longer exists or it is no longer appropriate for the asset to be retained.

Conclusion

A Good fund manager must also pay close attention to cost and risk in order to really capitalize on the cash flow opportunities. A financial institution runs on the ability to offer credit to customers. Ensuring the proper liquidity of the funds is a crucial aspect of the fund manager’s position. Funds management can also refer to the management of fund assets

Sources

Read more: http://www.investopedia.com/terms/f/funds-management.asp#ixzz1b7E5rdig

http://www.allbusiness.com/glossaries/funds-management/4951454-1.html#ixzz1b4Hascui