mutual fund is a financial instrument available to many.
In this situation, the most optimal form of investment for non-professional players of the stock market are collective investment in a mutual fund.
In case of the collective investment of the total amount of funds shareholders invested management company in assets with different yield and reliability: in securities, Bank deposits, real estate. Formed thus the investment portfolio, depending on qualifications and intentions of the management company optimally balanced on the reliability and profitability. The total value of the amount of money paid is high enough, that the investment portfolio has been flexible enough. In the event of a successful and correct management of the value of the investment portfolio, representing a total cost of the amount of money paid, is increasing due to the growth of the value contained in it assets. However, there is also a risk of a decline in the value of the investment portfolio - by improper management or as a consequence of the General unfavorable situation on the market, resulting in reduced and the value of the investment unit price.
The investment share is a registered security without par value. The value of can increase or decrease depending on the effectiveness of actions in the market of the management company. The investment unit is the only valuable paper, which you can buy or sell shares. The shareholder may have as a whole, and a fractional number of shares, including the number of shares less than one. In äîêóìåíòàðíîì the form of the security does not exist, the confirmation of the rights to the investment unit serves as an extract from the register of mutual fund, where electronically stored information about each ïàéùèêå.
The size of the share of mutual fund shareholders in the investment portfolio are different, the dimensions of shares may be varied at will of the shareholder.
Unit can be sold, thus getting back the current value of a share, reduced or increased with the acquisition. Dividends and interest in the mutual fund is not charged, the profit of the investor-shareholder is the difference between the buying price and the selling price of the investment unit price.
The time of appearance of the mutual investment funds, as a tool of management of investments, belongs to the first half - middle of the 19th century. Originally founded in Belgium, Switzerland and France, and then winning the confidence in the United Kingdom and the United States, mutual funds focused initially on large clients, offering the others to use the services of financial brokers. At the same time, the market was saturated with the demand for counselling and control of the means of small investors, and on a boundary of 19-20 centuries in the United States having the first investment consulting company. The first mutual funds appeared in the United States during the great depression, having proved their sustainability and profitability of for ordinary customers, but the greatest development of the mutual fund received only after the second world war, gradually becoming a serious competitor to the big banks, and other institutions of the financial management of funds of private investors. At the present moment the number of shareholders of investment funds in the us is comparable in size with the number of Bank depositors.
In accordance with the thrust of the major investment funds, mutual fund are divided into
•equity funds
•bond funds
•funds of mixed investments
•cash funds (funds money market)
•index funds
•funds of funds
•real estate funds,
•mortgage funds
•funds of venture investments
•direct investment funds
Depending on the terms, which are provided to the shareholders for the purchase and sale of the shares, mutual fund are divided into the open, interval and the closed type.
mutual fund open-type allow you to purchase or to sell the management company investment unit in any working day without limitation either partial or completely ceasing the contract of trust management and by means of repayment of investment units of the full or in part.
mutual fund of the interval type to sell and purchase shares only in certain periods (intervals). The maturities of investment Fund units the management company shall be established by mutual fund.
In the open and interval mutual investment funds can be transferred in trust management only cash.
Units of a mutual fund is a closed type can be presented for redemption the management company only after the expiry of the contract of trust management except for the cases expressly stipulated by law. That is, for a long time unit of a closed mutual fund closed to maturity. This disadvantage is offset by the fact that only in closed mutual fund payments of interim income for the shares and the fact that in trust management in such funds may not be accepted only cash, but, for example, and real estate.
As any financial instrument, mutual fund have their advantages and disadvantages.
The undoubted advantages include attractiveness for investors, who do not possess professional skills. Management company, offering professional staff consultants and having the necessary technical means of information, professional knowledge of the market, seeks to maximize the efficient use of common tools, which should ideally lead to sufficient profitability of investment. Of course, ïàéùèêó it is desirable to have an idea of mutual fund management companies in General, navigate among the companies offering their services on the financial market, to know the previous level of profitability of mutual fund and time of work in the market. However, the overall risk of such investments is significantly lower than in the independent game on the market.
The limitations of the risk of investment in mutual funds is a very significant advantage, since the collective investment market is very strictly regulated by the state, the law establishing the requirements and constraints that contribute to the maximum security of assets of the shareholder.
The disadvantages of mutual funds should be considered quite significant compared with other forms of less profitable investment spending, including the premium on acquisition, discounts on redemption of a share, the remuneration of the management company, Registrar, auditor, which can reach 10% - of the legally established limits.
The second drawback is the low liquidity of the investments in the mutual fund. Real cash the owner of the unit can only obtain after 18 days, legally assigned to the satisfaction of bids (three days) and the payment of cash funds (15 days). This time, of course, may be less, depending on the rules of trust management of the mutual fund, and in this aspect the investor should pay their attention when selecting a mutual fund.
