mutual fund


Mutual funds are separated heritages without juridical personality that belong to several investors, called participants, whose right of property is represented by a certificate of participation.


In this case, the participations do not have nominal value and are considered to be negotiable values represented by nominative titles or annotations in account.

The subscription and disbursement of the participations is done to the price that is fixed every day, and is the result of dividing the heritage of the fund between the number of participations in traffic.

The participants of the mutual fund do not have right to change the policies of investment, because they are predetermined for the managing company from the moment of his constitution.

 

It is necessary to know the elements that form the mutual funds:

-    Participant: Is a natural or juridical person who realizes contributions to the mutual fund.

-    Managing companies: It is a joint-stock company that administers and manages the fund.

-    Entity depositary: It is the company that one entrusts of the warehouse or the custody of the effective and active values that form the          mutual fund. They can be institutions depositaries: The banks, the savings banks, the companies and agencies of values and the credit          cooperatives.


It is important to know the classification of the mutual funds:

-  Ordinary Funds: They invest for the most part in fixed and / or variable revenue and in derivatives.

-  Funds of funds: They invest for the most part in other mutual funds.

-  Subordinated Funds: They invest only in one mutual fund.

-  Funds index: His politics of investment tries to reply a certain index.

-  Quoted Funds: They are negotiated in the stock market, as the actions.

We can also classify the mutual funds according to his investing vocation by the following way:

-  Monetary funds: They invest his heritage in titles of fixed short-term revenue with high credit qualification.

-  Funds of revenue it fixes: They invest his heritage in titles of fixed revenue.

-  Mixed funds: They are those who invest part of his heritage in titles of fixed revenue and part in titles of variable revenue:

     . Fixed mixed revenue: exhibition to revenue variables lower than 30 %.

      . Variable mixed revenue: exhibition to revenue variables lower than 75 % and superior to 30 %.

-   Funds of variable revenue: They are those who invest, at least, 75 % of his heritage in variable revenue.

-   Funds total or partially guaranteed: They guarantee of total or partial form the initial capital deposited at the end of the term. They can be:

       .Funds guaranteed of fixed performance.

       . Funds guaranteed of variable performance.

-  Funds of passive management: His politics of management consists of answering a stock exchange or financial index.

-  Funds of absolute return: They chase an aim not guaranteed of profitability and risk of periodic form. There use technologies of investment different from the traditional funds.

-  Hedge funds: They are those that are not subject to the restrictions of investment that concern the rest of funds. They can invest in any type of financial assets and have a high debt. They are slightly liquid.

-  Global Funds: They are those who do not have his politics of investment defined clearly.

 

On one side, investing in Mutual funds have a lot of benefits, as it can be, form example, that when you invest in a mutual fund, your money is managed by finance professionals. Mutual funds provide the benefit of diversification across different sectors and companies. Mutual funds widen investments across various industries and asset classes.
Mutual funds are also usually very liquid investments and investors can benefit from the convenience and flexibility offered by mutual funds to invest in a wide range of schemes. 

On the other hand, investing in mutual funds involved risks: A risk and Reward: The diversification that mutual funds provide can help ease risk by offsetting losses from some securities with gains in other securities. And in a Mutual Fund exists a lack of Control, I mean, investors can’t determine the exact composition of a fund’s portfolio at any given time. Also they can’t directly influence which securities the fund manager buys.

 

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What is a Mutual Fund?

What is a Mutual Fund?

How does a Mutual Fund work?

How does a Mutual Fund work?