Unit Investment Fund (UIF) - a form of collective investment, which involves pooling investor funds (shares) under the control of professional managers.
This tool is gaining popularity among Russians.
The essence of mutual funds and their benefits
Traditional investors in the financial marketsperform major participants such as investment banks, insurance companies, pension funds, which have operations in large volumes. Mutual Fund investments provide access to a wide range of people, as it implies the union of private property. Shareholders get all the advantages of large private investors.
The scheme of mutual funds is extremely simple - receivedmoney management company invests in various assets (stocks, bonds, precious metals, etc.). If the value of the investment portfolio of the mutual fund increases, so does the value of the share of the investor, as well as its profit. Having sold a share, the investor makes a profit (or loss) equal to the difference between the purchase / sale of the unit.
The management company for servicesreceives a certain fee - a bonus when you buy the fund unit (up 1.5%), discount for sale (up to 3% of the value of the unit) and the percentage of net asset value (from 0.5% to 5%). Moreover, these commissions are held regardless of profit or loss of the investor.
Initial unit price depends on the fund, the minimum investment amount may be from 1000 r. It is best to buy shares after the market decline, because in its correction term may occur.
The main advantages of mutual funds, which cause their popularity among private investors, are:
- Low price of entry to the financial market-
- Expanding the range of investment instruments (diversification of investments) -
- The possibility of investing without special knowledge, thanks to the professional upravlyayuschim-
- The yield on shares is significantly ahead of the profit from banking vkladov-
- They allow you to reduce the time costs associated with the investment.
Finally, the state implemented a strict control over the management companies, which is an additional guarantee of its stability.
Types of mutual funds
Mutual funds can be divided into open, interval andclosed. Public Mutual Funds are available for a wide range of people, they can buy the shares at any time. In the interval of buying and selling funds are made only in certain period of time, such as once a year. In closed output is possible only in the late period of the mutual fund. This, as a rule, funds investing in real estate.
Depending on the direction of investment mutual funds are divided into bond funds, equity, balanced funds, index.
How to buy shares
To purchase shares must apply inthe management company or the agent bank mutual fund and indicate their intention. Next, you need to sign a contract with the Mutual Fund and to transfer money to the account of the Fund.
After confirming the purchase of shares of the client will be provided notice of the opening of the account, on admission units and check on the number of units. Then at any time you can not buy additional shares.