In addition to bank deposits, money can be invested in mutual funds. This type of investment is more effective and can bring income higher than a bank deposit. Therefore, many investors choose this particular investment option.
A mutual investment fund (MIF) is capital managed by a management company. A mutual fund brings together the money of individuals and legal entities - shareholders.
By purchasing a fund share, an investor gets the opportunity to enter the securities market with a small amount of money and receive income on a par with the income of banks, large companies and other large market participants. The investor needs to select the type of fund and purchase shares of this fund. At the same time, you do not need to have special knowledge of stock markets. The money will be managed by professionals, which reduces risk and saves personal time. After that, the management company invests money in stocks, bonds, precious metals, bank deposits and real estate. If successful, the fund makes a profit and the investor's capital grows. If the fund loses money, then the investor suffers losses.
Funds are open, interval and closed. Units of an open-ended fund can be purchased or sold at any time. Shares of interval funds are purchased for a certain period and can be sold only during a certain period. Closed-end funds are mainly real estate funds. They have a large entry threshold, investment period from 3 to 5 years.
Before investing money, you need to choose an investment method. Equity funds are considered risky investments. They allow you to get high income in a short time. However, the higher the profitability, the higher the investment risk. Therefore, the investor must be prepared for sharp market fluctuations and not exclude the possibility of losing part of the invested funds.
If you need to save money, choose a bond mutual fund. Bond funds have lower returns and, accordingly, minimal risk. To reduce the degree of risk, money should be invested in several funds. Some of the money can be invested in stocks and some in bonds.
When investing in mutual funds, an investor should remember that such deposits, unlike bank deposits, are not insured by the state. Therefore, the risk is entirely borne by the investor.
Shares of a fund can be bought, sold, exchanged from one fund to another, pledged, donated and inherited. There are certain conditions for buying and selling shares. As a rule, when buying shares, a surcharge is introduced in the amount of 1.2%, and when selling shares, a discount of 0.5% -1%. These commissions are the remuneration of the management company for its work. The exchange of fund units is free of charge. After the sale of the share, if the investor receives income, it is necessary to pay tax in the amount of 13% of the profit.
To invest in mutual funds, an investor needs to contact a management company or the office of an agent bank. To apply for the purchase of shares, you only need a passport.
