Fund Administration

The lack of knowledge about the working of the stock markets and complex financial instruments involved has played a considerable role in the growth of collective investments schemes, commonly known as mutual funds.

Key players in a mutual fund:

The key players who are involved in the life cycle of a typical mutual fund include:

• A fund manager who manages the investment decisions, and
  
• A fund administrator who manages the other activities involved in running the mutual fund
  

Primary Activities of Fund Managers:

The primary activities with fund managers is seeking and ensuring a smooth addition of investors who wish to invest in a particular fund, and managing the flow of money.
Apart from overlooking the flow of money, many administrative tasks are involved in running such schemes. Some of the activities involved in fund administration are:

• Preparation of the accounts, in many cases annual accounts
• Daily accounting, recording and maintenance of all investment activities including multi currency accounts
• Corporate actions and cash reconciliations
• Calculations and reporting of NAV, dividend accruals, total expense ratio (TER), taxable income by jurisdiction, security lending income, book cap stocks, etc.
  

Outsourcing opportunities

Over the years the above activities which complement the management of the assets are being considered for outsourcing. Fund managers have been seeking the help of KPOs such as S.G Analytics to administer their funds.

Role of KPOs

This kind of outsourcing is important not only for the fund administration but also for fund analysis. Well kept records also ease the process of information aggregation. This is also useful for mining the past records for future analysis.