Based on legal rules, mutual funds are divided into:
* Mutual fund companies form
The Company collects funds by selling shares of the prime (IPO), then use those funds to invest in various types of securities.
o Mutual fund open (open-end investment company); where investors can buy shares of mutual funds and resell without being limited the number of shares issued.
o Mutual fund closed (close-end investment company); investors can only purchase through the stock exchange where shares of mutual funds registered with a certain amount.
* Mutual Fund Collective Investment Contract (KIK)
This is the most common form, where there is a contract between the MI and the custodian banks that binds the holder of units (UP). MI is authorized to manage the collective investment and custodian banks have the authority to conduct collective care. KIK mutual funds but did not issue new shares via UP to the size of the amount specified in the Articles of Association. Investors who participate will get a proof of participation in the form of a confirmation letter from the custodian bank.
According to the investment portfolio, mutual funds are divided into:
* Money Market Mutual Funds
The majority of mutual fund investment allocations in the money market securities, debt securities futures is less than one year such as SBI, deposits, and so on. The level of risk (and return) is relatively low. This fund is suitable for short-term savings or complement deposits. There is no cost of purchasing and selling again. Net Asset Value / NAV per UP is always “on-reset” USD $ 1000 per day.
* Fixed Income Mutual Funds
Mutual funds are at least 80% allocation of investment in long-term debt securities. Potential risks and returns is greater than the savings, deposits, or money market mutual funds. Suitable for medium-term investments (less than 5 years). There are some mutual funds that share the benefits of regular dividends.
* Mutual Fund Shares
Mutual funds that invest at least 80% of the portfolio to equity securities (stocks). Compared to other mutual funds, the potential risks and returns are relatively high and the most suitable for long-term (3 years or more).
* Mutual Funds Mixed
Asset allocation is a combination of equity securities and debt securities that are not included in the above categories. The potential risks and returns are usually located in the fixed-income mutual funds and stock mutual funds.
There are also several other types of mutual funds such as mutual funds protected, index mutual funds, ETF LQ45 mutual funds, international mutual funds are also very diverse. Further discussion, God willing, will be written on another occasion.
