Business And Financial

Before investing in any type of investment, we should know in advance what and how such investment instruments, especially mutual funds so that they can better understand their characteristics in terms of profit and risk. Definition of mutual funds under the laws of capital markets mentioned “Mutual fund is a collection of funds from public investors (investors) are then reinvested by the Investment Manager in the form of portfolio investments, which can form deposits, stocks, bonds or other securities.

To more easily, in general terms of the mutual fund is a collection of funds from public investors (investors) to then can be managed by the Investment Manager and then invested in various types of financial products. Investment managers who manage mutual funds must get permission from the Capital Market Supervisory Agency. Further funds collected by the investment manager and then placing it in a spread set into a variety of securities instruments such as stocks, bonds, Government Bonds, as well as bank products such as savings and deposits.

Setting this fund placement arrangement is an investment portfolio. However, as has been explained that the investment portfolio of mutual funds do not consist of only one investment product, but dispersed to the various investment products. This distribution strategy known as diversification, the aim is to reduce the loss by spreading the investment risk. Based on a diversified investment portfolio, then mutual funds are divided into four types, namely:

First, the Money Market Fund, where the Investment Manager will invest a majority of more or less nearly 80 percent of investor money into investment products that provide fixed income such as interest payments on savings, deposits, and SBI. The remaining fraction is placed into the bonds (debt) short-term.

The level of potential risk Money Market Mutual Fund or conservative lowest compared to other mutual funds, Money Market Mutual Funds suitable for you who have high risk but still want to get a higher return than bank deposits, Fixed Income Mutual Funds also suitable, if you just want to put money into mutual funds in the short term less than one year.

Second, Fixed Income Investment Fund, which the Investment Manager will invest the majority of investor money into the 80% investment products fixed income, especially in bonds. The remaining 20% is invested in money market instruments or bank products such as savings and deposits.

The level of potential risks including middle category Fixed Income Mutual Funds likely conservative Fixed Income Mutual Funds suitable for you who expect a fairly steady income from the investment stable and not too volatile. Fixed Income Mutual Funds also suitable if the placement of funds between one to three years, for those within the Fixed Income Fund has the potential to provide higher returns than RDPU. But in the long term increase, such as 10-year term time Fixed Income Mutual Funds not rise as high as the increase or Mixed Fund Mutual Shares Fund

That’s less than the comparison of characteristics of money market mutual funds with fixed income mutual funds. Meanwhile, two types of mutual funds are, as follows: Third, Mixed Fund, which the Investment Manager will invest the money to investors in stocks and fixed income instruments, each with the composition of investment allocation roughly equal, 50 per cent: 50 per cent. Fourth, Mutual Shares Fund, which the Investment Manager will invest the most money, or nearly 80 percent in stocks and the rest incorporated into fixed income instruments like bonds or money market instruments such as savings and deposits.

Well, have not you imagine? If the mixture Fund has medium investment risk tends to aggressive, While Stock Fund has an aggressive investment risk. Both types of mutual funds are appropriate if the funds are placed in a Mutual Fund and Mutual Funds Mixed Shares will not be used in a long time. For example 10 years, means have to invest for the long term. Because stock prices fluctuate in the short term, however tend to take hold in the long run. The increase in stock prices in the long term potential is higher than the price fixed income instruments. But be careful high return worth the risk too high.