AMC (fund house)

An asset management company runs mutual fund schemes. It employs the fund managers, decides what to buy and sell within each scheme's rules, sets the expense ratio within SEBI's limits, and publishes the NAV and the portfolio.

A mutual fund in India is set up as a trust, and several parties have separate roles:

• The sponsor sets up the mutual fund and the AMC.
• The trustees oversee the AMC on behalf of investors.
• The AMC manages the money.
• The custodian, a separate regulated firm, holds the shares and bonds.
• The registrar, or RTA, keeps the record of who owns which units.

Because a scheme's assets belong to the trust and sit with the custodian, they are kept apart from the AMC's own money. If an AMC is sold or closes, its schemes pass to another AMC or are wound up and paid out to unitholders.

India has more than 50 fund houses. Each one opens a separate folio for you when you first invest with it.