Mutual investment funds (MIFs) have been operating in Russia since 1996. Their activity is based on a mechanism through which private investors transfer money into the hands of professional managers and receive profits from their work.
Instructions
Step 1
Mutual funds are created with the aim of obtaining profit from asset management and distributing it among shareholders in proportion to their shares. The property of the fund is formed at the expense of shares - registered securities, which certify the owner's right to a part of the fund.
Step 2
How do mutual funds work? Private investors buy shares. All collected money forms the assets of the investment fund. Professional managers use them to buy shares, bonds, precious metals and other assets, depending on the industry specifics of the fund. With the growth of their value, the share also adds to the price. A private investor can sell a share at any time (or in accordance with the rules of the mutual fund), receiving a profit in the form of the difference between the purchase and sale prices. At the same time, the investment portfolio is always diversified, i.e. distributed among different issuers. This reduces the risks of a fall in the value of a share.
Step 3
The mutual funds on the market can be classified on various grounds. So, depending on the time of the possible purchase / sale of a share, they distinguish between open (a share can be sold at any time), closed (only at the end of the period of the mutual fund) and interval (with a fixed frequency, for example, once a year). In terms of investment, stock funds, bond funds, mixed funds, index funds, mortgage funds, etc. are distinguished.
Step 4
The popularity of mutual funds is due to the fact that they allow an ordinary citizen, who does not have special knowledge in the field of the stock market, to profit from operations with securities. In this case, they are only required to buy shares, the rest will be in charge of professional managers. Their cost is available to everyone - the price of a share is on average 2-3 thousand rubles.
Step 5
Among other advantages of mutual funds - strict control over their work by the state. But this is at the same time a lack of mutual funds, since for a private investor, investment directions are not limited.
Step 6
The mechanism of operation of mutual funds has already proven its effectiveness in world practice. Thanks to mutual funds, you can get a higher profitability than from bank deposits. It depends only on the dynamics of the securities included in the share portfolio. Whereas interest rates on deposits are rarely much higher than inflation. However, investments in mutual funds are a more risky investment instrument than bank deposits and are not subject to compensation at the expense of the state. The economic benefit from the purchase of a share is also the absence of taxation for the period of ownership. The tax is paid only when the share is sold.
