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Get To Know the Mutual Fund: Characteristics, Advantages, Risks and Types

Mutual funds are one form of investment or capital funds management pattern for investors to invest in investment instruments available in the market and then the Fund managed by the investment manager. Own mutual funds are popular lately because in addition to having a high liquidity, mutual funds also do not require the high cost to get started.


Mutual funds were first published on March 21, 1924, named Massachusetts Investors Trust. In 1929 when the stock exchange crashed, industry growth mutual funds also be slowed down. Responding to this, the Congress of the United States issued the Securities Act of 1933 (Securities Act of 1933) and the Stock Exchange Act 1934 (Securities Exchange Act of 1934). Based on the regulation, mutual funds are obligated to be registered at the Securities and Exchange Commission or referred to the SEC.

On the characteristics, mutual funds may be divided into two mutual funds and mutual fund enclosed. Open mutual funds are mutual funds that can be sold back to the company that issued the Investment Management, while mutual fund enclosed is a mutual fund that cannot be resold.

Mutual funds have a number of advantages compared to other forms of investment such as managed by a professional Investment Management, have transparency information, have high liquidity, and diversify investments and costs cheap deals.

Any form of investment is certainly no exception involves the risks of mutual funds. The first mutual fund risk is the risk of decline in the value of the net assets of unit of equity, liquidity risk, market risk and the risk of default.

To start investing mutual funds, you must first know and understand the rules of the game; you should also study and consider the risks. Next, you have to find good investment manager and trusted.

Mutual funds are essentially divided into five types i.e. stock mutual funds, mutual funds, fixed-income mutual funds, money market mutual funds and index mutual funds with a mix of stocks and mutual funds are the most popular.

Now, mutual fund investment is not to mention the things that are taboo for the Millennial and became one of the favorite investment choices. However, for those of you who just want to start investing on this one, it's good to know in advance about the different types of mutual fund investments.

Form of Investment Mutual Funds Based On Their Characteristics:

1. Open mutual fund

This type of open mutual funds is mutual funds that can be sold back to the company's investment management without going through the mechanics of trading of the stock exchange.

2. Mutual funds Closed

Kind of a closed mutual fund is a mutual fund cannot be sold back to the company's investment management. The form of a mutual fund can only be sold to other investors through the stock exchange trading mechanisms.

In addition to based on his character, generally the kind of popular mutual funds, namely:

1. Money market mutual funds

On the type of investments money market mutual funds, the investment manager will invest the money into investment instruments such as money market deposits, bonds and Bank Certificates for a period of less than 1 year

2. Fixed income mutual funds

The form of the fixed income mutual fund investments is a mutual fund where the money will be invested by investment managers into bonds as an investment. The rest of the money sometimes also invested in other investment instruments.

3. Mutual funds Shares

True to its name, on the type of investment mutual fund this one fixed income money would be invested by the investment manager to the stock market as a major investment. The rest of the money sometimes also invested in other investment instruments.

4. Mutual Fund Mix

This one kind of investment can be said to be a combination of fixed income mutual funds and mutual fund Shares where the investment money mutual funds will be invested in balanced in the form of stocks and bonds.

That various forms of popular mutual funds investment. If you're still confused and in doubt as to the type of investment mutual funds, you could try an online mutual fund investing with an easy process and the risk is very minimal. Investment mutual funds online is perfect for you who still beginner in investing mutual funds.

Tag : Investment
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