Posted On : 13-04-2018

Identifying Mutual Funds and Its Types (3)

Mari Cari Tahu Seperti Apa Profil Risiko Investasimu (2)

Investments have important roles in your financial life plan and future. However, have you started making an investment? Ideally, you should start investing your first paycheck.

If, by now, you still haven’t done it, then it is time. But before going there, you should know what a mutual fund is. According to UU No. 8 year 1995 regarding Stock Market, a mutual fund is an investment vehicle made up of a pool of money collected from investors and henceforth invested in Portfolios of Securities operated by an Investment Manager.

In this instance, a portfolio of securities contains capital market’s financial assets such as stocks, bonds and deposits.  Such collected funds will later be invested by Investment Manager into several investment instruments such as stocks, bonds or deposits.

Mutual fund is also an investment instrument registered with and supervised by the Financial Services Authority (OJK). The investment manager operated and managed the fund is also registered with and supervised by the Financial Services Authority (OJK). So, you need not to worry about losing your fund.

Then, what about the type of mutual fund itself? Mutual funds can be classified into these following types:

Money Market Fund

These funds invest in domestic money market instruments and/or debt securities with a maturity date more than a year and/or remaining maturity date of less than one year.

This type is suitable for short-term investments (less than a year) and/or suitable for investors with a very conservative risk profile.

Protected Fund

These funds feature a protection mechanism of 100% of the initial fund value until the maturity date is over and is not valid if the fund is sold prior to its maturity date.

This type is suitable for investments with a period of 1-3 years and/or suitable for investors with a conservative risk profile.

Fixed-Income Fund

These funds invest in debt securities at least 80% of its net asset value. This type is suitable for investments with a period of 1-3 years and/or suitable for investors with a conservative risk profile.

Balanced Fund

These funds invest in equity securities, debt securities and/or domestic money-market instruments, each of which is no more than 79% of its net asset value, and the investment fund portfolio must include equity securities and debt securities.

This type is suitable for investments with a period of 3-5 years and/or suitable for investors with a moderate risk profile.

Stock Fund

These funds invest at least 80% of NAV in equity securities. This type is suitable for investments with a period of more than 5 years and/or suitable for investors with an aggressive risk profile.

If you are interested to learn more about mutual funds, please click this link and to check available products, you can click here

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