8.4Who manages mutual funds?
1What is it?
A fund manager (with a research team) at an Asset Management Company (AMC) makes the investment decisions, overseen by trustees and regulated by SEBI.
2Why does it exist?
This structure separates duties: the AMC manages, trustees protect investors, a custodian holds the securities, and SEBI regulates.
3Diagram
Mutual fund structure
Sponsor
- • Sets up the fund
Trustees
- • Protect investors
AMC + fund manager
- • Make investment decisions
Custodian
- • Holds the securities safely
SEBI
- • Regulates everything
4Quick revision
- Fund manager at an AMC decides.
- Trustees and custodian protect investors.
- SEBI regulates.
5Knowledge check
Q1. Who holds the fund’s securities?Show answer
The custodian.
Q2. What is the trustees’ role?Show answer
To protect investors’ interests.
Q3. If an AMC shuts down, is your money gone?Show answer
No. Assets are held separately by the custodian for investors.