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Posted by Sam Bernhard (MONEY FORUMS: 6, Answers: 0)
Asked on November 15, 2015 9:12 pm
Here is the simplest answer Sam: The company the managers work for set goals and parameters for each fund and the manager looks to maximize the return given the goals. For example, if it is fund that specializes in Health Care, she/he would look at companies in that space and analyze them to select which ones to buy/sell. The other extreme would be an index fund, where the "manager" is a computer program that buys stocks in proportion to the index the fund is mimicking as new investors come on board.