A mutual investment fund (MIF) is a form of collective investment, which involves pooling investors' funds (shares) under the management of professional managers. This tool is gaining more and more popularity among Russians.
The essence of mutual funds and their advantages
Traditional investors in financial markets are large participants such as investment banks, insurance companies, pension funds, which carry out operations in large volumes. Unit investment funds provide access to investment for a wide range of individuals, since they involve the pooling of property of individuals. Shareholders receive all the benefits of large private investors.
The scheme of operation of mutual funds is extremely simple - the management company invests the money received in various assets (stocks, bonds, precious metals, etc.). If the value of the investment portfolio of a mutual fund increases, so does the value of the investor's share, as well as his profit. By selling a share, the investor makes a profit (or loss) in the amount of the difference between the purchase / sale price of the share.
The management company receives a certain remuneration for the services provided - this is a premium on the purchase of a fund unit (no more than 1.5%), a discount on sale (up to 3% of the unit's value) and a percentage of the fund's net asset value (from 0.5% to 5 %). Moreover, these commissions are withheld regardless of the investor's profit or loss.
The initial price of a share depends on the fund, the minimum investment amount can be from 1000 rubles. It is best to buy shares after the market falls. in the future, it may be corrected.
The main advantages of mutual funds, which determine their popularity among private investors, are:
- low price of entry to the financial market;
- expansion of the range of investment instruments (diversification of investment directions);
- the possibility of investing without special knowledge, thanks to professional managers;
- profitability on shares can significantly outstrip profit from bank deposits;
- they allow you to reduce the time costs associated with investment.
Finally, the state exercises strict control over the management companies, which serves as an additional guarantor of their stability.
Types of mutual funds
Mutual funds can be divided into open, interval and closed. Open-end mutual funds are available to a wide range of people, they allow you to buy shares at any time. In interval funds, purchases and sales are made only in a certain period of time, for example, once a year. The closed exit is possible only at the end of the period of the existence of the mutual fund. These are, as a rule, funds that invest in real estate.
Depending on the areas of investment, mutual funds are subdivided into bond funds, stock funds, mixed funds, index funds.
How to buy shares
To purchase shares, you must contact the management company or the mutual fund agent bank and inform about your intention. Next, you will need to sign an agreement with the mutual fund and transfer money to the fund's current account.
After confirming the purchase of the shares, the client will be provided with a notification about the opening of an account, the enrollment of shares, and a statement of the number of shares. Further, at any time it will be possible to buy additional shares.
