Interested in Mutual Fund Investment? Find Out the Types, Advantages and Risks Here!

Investment does sound interesting and promising for some people. However, not everyone wants to invest because they are afraid to start. Many people think that investment is a high-risk thing, it is difficult to start, even need to spend a lot of money to do it. These things are myths that make people reluctant to invest. In fact, with investment, you can use the funds that you have at the moment to be a future profit

Investment itself is divided into two types, namely real assets (physical) and non-real assets (financial / financial) . Real assets (physical) are investments that have forms such as land, property, gold and so on. Meanwhile, non-real assets (financial / financial) are intangible investments such as stocks, bonds and mutual funds. This time, JULO will discuss mutual fund investments for those of you who just want to start or are just interested in investing.

Mutual funds are one of the alternative investments aimed at investors, especially small investors and investors who do not have much time and expertise to calculate their investment risks. So, this investment is designed for people who have capital and the desire to invest, but are constrained by time constraints. Mutual fund rules are stated in the Capital Market Law Number 8 of 1995, so that Mutual Funds are an official and safe investment. Mutual funds are expected to increase the role of local investors to invest in the Indonesian Capital Market.

There is one important role that exists in mutual funds, namely the Investment Manager. Investment managers are parties, who can be a company or individual, who have the authority to manage investor assets, namely mutual funds. Simply put, mutual fund investors hand over all their funds to the investment manager.

 

Types of Mutual Funds

credit funds

There is already a little picture of mutual funds, right? Now, we first recognize the types of Mutual Funds!

 

1. Stock Funds

Equity funds are a type of mutual fund that invests at least 80% of assets in the form of Equity Securities. Stock mutual funds are the most popular mutual funds because of the large return / profit. However, despite the high returns / benefits offered by equity funds, the risks that need to be faced are very high compared to other types of mutual funds.

 

2. Mixed Mutual Funds

Mixed mutual funds are often referred to as hybrid funds, where investors will invest their funds in various types of Securities such as Equity (Stock), Money Market (Deposits, or Debt (Bonds). Mixed mutual funds are ideal for beginners in a period of 3 to 5 years: Mixed mutual funds are flexible and safe mutual funds because risks are spread over several investments.

 

3. Fixed Income Fund

Fixed income mutual funds are investments that are at least 80% of assets in the form of bonds or debt securities. The risk is higher than money market mutual funds. Fixed income mutual funds are suitable for a period of 1 to 3 years. The profit or return obtained is also stable.

 

4. Money Market Mutual Funds

Money market funds have the lowest risk compared to other investments. Money market mutual funds are used to maintain liquidity and are placed on deposits, Bank Indonesia Certificates (SBI) & bonds. The maturity of a mutual fund is less than one year, but the profit or return obtained is also small.

Now that’s the type of mutual fund that you need to know. Now, we turn to the advantages and risks that might be faced when investing in mutual funds, huh!

 

Advantages of Mutual Funds

Advantages of Mutual Funds

  1. Mutual funds can start with a little capital
  2. Diversification, reduce investment losses.
  3. There are many choices of investment products, so they can be adapted to capabilities.
  4. High liquidity, so it’s easy to melt.
  5. The potential return offered is high

It seems impossible if there are no risks to be faced when investing. The same goes for mutual fund investments. Come on, consider the possible risks faced when investing in mutual funds!

 

Investment Fund Risk

Investment Fund Risk

  1. Liquidity risk, the likelihood of withdrawal or disbursement of large amounts of funds is carried out simultaneously, so there is an opportunity for investment managers to be overwhelmed in managing this which causes delays in disbursing funds.
  2. Risk of bankruptcy
  3. The risk of reduced investment value caused by falling prices from Securities stocks, bonds, and so on.
  4. Decreasing Net Asset Value (NAV), which is caused by deteriorating stock market performance, political situation, or unstable economic conditions.

If you have limited capital to start investing, you can make mutual fund investment a good and ideal investment choice. What needs to be remembered is that the presence of an Investment Manager can help investors to get maximum profits. So, are you interested in starting a mutual fund investment?

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