Fund manager vs Portfolio manager – side-by-side comparison

Have you ever heard of the comparison of Fund Managers and Portfolio Managers? Why is knowing the similarities and differences between these profitable professions crucial? Apart from classic brokers and traders, there are various other financial careers that every non-specialist should know in the world of investing and trading.

Whether you’re just starting your investing career or a seasoned investor, you must understand what each role in this dynamic industry entails. But, before we compare Fund manager vs Portfolio manager, let’s separate each of these careers individually and explain in detail what they entail.

Let’s see what a Fund manager is in the first place and what is the exact job description of it, shall we?

What is the Fund manager position about?

A fund manager refers to a professional who is responsible for managing an investment of funds on a client’s behalf. The main focus of a professional fund manager is to properly execute the fund’s investment strategy and oversee its portfolio trading operations. The fund can be supervised by an individual, two individuals as co-managers, or a group of three or more individuals.

Fund supervisors receive compensation for their services, a proportion of the fund’s mean assets under investment management (AUM). They can be discovered working in fund administration with shared funds, retirement funds, trust funds, and speculative stock investments.

These managers need to ensure to save appropriate accounting records for investment funds. If a client desires so, he can also participate in creating particular investment strategies and managing various trading actions. Usually, you can find high-profile fund manager positions in private corporations or companies.

How to start a career in fund management?

To become a Fund Manager, here are the essential steps:

1. Ensure to get yourself a Bachelor’s Degree in the following fields: finance, accounting, economics, or business.
2. Look for various internships to gain the necessary industry experience.
3. Enter finance with a Financial Analyst role.
4. Consider pursuing an MBA or a master’s degree in finance.
5. Acquire the Chartered Financial Analyst (CFA) designation to showcase the dedication and expedite learning.

What is the Portfolio manager role about?

A Portfolio manager is an individual or a professional group responsible for investing and overseeing the assets of requited, mutual benefit, and impassable funds while implementing their investment strategies and handling daily portfolio trading. 

The role of a portfolio manager is crucial when considering fund investments. Portfolio management is able to be either active or it can be passive, and past performance data shows that only a small number of numerous fund managers constantly utperform the market.

A portfolio manager plays a significant role in various types of funds that include: 

• Mutual funds
• Hedge funds
• Venture capital funds
• Exchange-traded funds. 

They have a direct impact on the fund’s overall returns through their management of the fund’s portfolio. Successful portfolio managers typically have extensive experience in financial management, investment research, and risk management.

How can you categorize portfolio managers?

Portfolio managers can be categorized as:

• Active portfolio managers.
• Passive portfolio managers. 

Passive managers align their strategy with a market index for comparable long-term returns. Growth investors must consider the chosen benchmark when evaluating passive funds. Active ones aim to surpass the market non-stop, and their style impacts fund performance.

Prospective investors should review marketing material for insights into their approach.

Despite the strategy, successful portfolio managers are required to posses qualities like ideation for active managers and astute decision-making for passive managers in selecting the index. 

Managers play a vital role in fund performance, considering risk management, asset allocation, financial analysis, portfolio performance, and investment decisions. Remember the manager’s track record, risk management skills, asset allocation decisions, and financial analysis abilities when evaluating funds for potential investment.

How to start a career in portfolio management?

1. Earn yourself a relevant bachelor’s degree in the following fields: finance, accounting, or business for analyst positions.
2. Obtain industry experience through relevant internships or entry-level jobs in portfolio management.
3. Consider getting a master’s in finance or business administration for senior roles.
4. Start as a financial analyst, learn budgeting and valuation, and potentially supervise.
5. Earn particular certifications and licenses like the CFA and securities licenses if required.
6. Be an active member of development and networking.
7. Apply for portfolio manager positions: With experience, certifications, and skills, apply for senior roles.

Now that you’ve clearly understood these interesting and profitable job titles and descriptions, it is time to do a proper Fund manager vs Portfolio manager side-by-side comparison!

What is the Fund manager vs Portfolio manager comparison like?

Job title

Fund manager

Portfolio Manager

Duties

Oversees the investing portfolio, selects investments, and makes decisions based on growth investing strategies.

Manages investments within a portfolio, monitors performance, and develops strategies for maximizing share price.

Requirements

Bachelor’s degree in business, economics, or related field, with optional certifications.

Bachelor’s degree in business, economics, or related field, with optional certifications.

Work Enviroment

Can work in an office or on the road, often long hours.

Typically works in an office, may travel to meet clients.

Skills

Requires analytical skills, in-depth knowledge of investment types, and effective communication with clients.

Requires analytical skills, strategic thinking, and a general understanding of financial markets.

Average Salary

$92,932 per year.

$96,423 per year.

Bottom Line

Fund managers and portfolio managers play distinct roles in investment management in general. They employ financial statement analysis, including income statements, to assess investment opportunities while mitigating operational risks.

Fund managers usually utilize growth investing strategies to select investments and aim to maximize returns within a diversified investing portfolio. They possess in-depth knowledge of investment types. 

On the other hand, portfolio managers are more focused on managing investments within a portfolio to maximize share price. They demand a general understanding of financial markets and develop strategies for optimal performance. Both roles necessitate analytical skills, a bachelor’s degree, and effective communication. The average annual salaries for fund and portfolio managers are $92,932 and $96,423, respectively.