Mutual investment funds in the world. Opening - Promotions
Most of the current investment instruments require considerable knowledge and practical experience in their use. Especially you can not do without special knowledge if you expect to receive a solid share of the profits. But what about those who do not have the time or desire to “immerse themselves in the material”? We advise you to pay attention to shares investment funds based on the principle trust management capital.
Mutual investment funds are engaged in the accumulation of funds that are invested in various projects in order to make a profit. Creation of a fund legal registration and direct management of affairs is carried out by the management company. She, in the terms predetermined by the contract, distributes the income of the fund among the investors, in proportion to their shares.
Among all possible areas of investment, mutual funds invest in:
- stock;
- bonds;
- real estate;
- deposit certificates and deposits;
- mortgage
- loans;
- artistic values, etc.
The activities of investment funds are regulated by legislative level which reduces the risk of fraud in this area. At the same time, no one can insure the depositor against the risk of reducing or even losing the invested funds. Mutual funds in Russia can only predict the return on investment in them. This is done on the basis of a superficial analysis of the market and indicators of past reporting periods. But any guaranteed income in this area is extremely rare.
Investing money in a mutual fund provides for the acquisition by the investor of a part of his assets - an investment share. Most of the funds set minimum deposit for such a share, which is measured in shares of the number of all assets of the mutual fund. The investment share of the fund certifies the participation of its owner in the association of investors and gives the right to receive a part of the profit. The depositor has the right to demand productive trust management of funds, the right to control the management company, the right to compensation for the value of the share in case of termination of the agreement and violation of its terms. In addition, an investment share is a security that can be sold, bought or pledged.
As for the risks of losing capital, in comparison with other investment options, they are not so great. As a rule, such funds are created by large management companies with investment experience. Mutual investment funds declaring conservative principles of their work are close in reliability to banking structures. However, the return on investment in them hardly exceeds bank deposits.
Not all funds are conservative in their investment strategies. So, in exchange for higher risks, an investor can receive an annual income equal to 40-60%, and in some cases even 100% of the initial investment. In any case, the profitability of the fund directly depends on the chosen instruments and the aggressiveness of the principles of work.
Types of mutual funds
Any private investor who wants to invest in mutual funds must understand their types and understand the differences. Experts divide all investment funds existing in Russia into several types:
- Open share. In it, investors are endowed with the right to freely dispose of their shares. Investments in such funds are characterized by high levels of liquidity and accessibility to the general population, due to the minimum amounts for contributions.
- Interval PIF. The contracts pre-determine the time intervals in which the unit holders have the right to sell their shares. Similar rules are established for the withdrawal of funds.
- Closed-end investment fund. Such funds operate for a strictly defined period, at least 5 years. The sale and withdrawal of funds before the expiration of the mutual fund is excluded, however, in some cases, the sale of shares to other fund participants is allowed. A closed mutual fund is a kind of private club of investors created for a specific project. The value of the shares is calculated in millions of dollars, which is why participation in them is available only to wealthy investors.
There is a classification of mutual funds according to the areas of investment. It highlights:
- Equity funds. The predominant direction of investment of such funds is shares. Potentially, such funds have the highest levels of return, but are also characterized by fairly large risks. According to experts, the most promising investments in equity funds will be long-term investments.
- Bond funds. They are distinguished by their conservatism, since bonds assume a lower but stable yield. Ideal for investors who are looking for the most reliable and long-term investment instruments.
- Funds money market. The main part of the assets of such funds is contained in deposits, due to which they are characterized by a guaranteed, but relatively low return.
- index funds. index funds are contained in the shares of companies listed on the stock market. Their main income is earnings on stock indices. It should be noted that with relatively low risks, it can be quite high.
- . Each such mutual investment fund is the founder of an enterprise. The creation of such funds is aimed at a specific type of business or commercial structure. According to investors, investments in private equity funds are characterized by increased risks with high rates of return.
- Real estate funds. The goal is to invest money in a specific construction project. Such mutual funds are organizations, mostly of a closed type. They are created for a long period, which is why they differ in long-term investments. Quite an attractive investment option, characterized by high returns. It is especially attractive to wealthy players.
- Mixed investment funds. The assets of such funds are contained in various financial instruments. They differ in average rates of return and average terms of investments. Investing in mutual funds of this category allows investors to diversify risks as comfortably and quickly as possible.
Advantages of mutual funds for investors
According to the reviews of professional investors, we highlight the main advantages of investing in mutual funds:
- Transparency of investment activity. Beyond hard state control over the activities of mutual funds, an important factor confidence in them is the transparency of their activities. Anyone can find free access financial reports organizations to prevent fraud.
- Trust management allows you to make investments in any investment instruments, even without necessary knowledge. professional management reduces risks as much as possible.
- By investing in a fund with different assets, the investor gets the opportunity to expand the possibility of making a profit within the framework of one project.
- Availability of mutual funds. Establishing a minimum size for deposits makes investing in them as much as possible in a simple way investment. Such investments are available today for most potential investors.
- Investment units have high liquidity, which is why investors in most open mutual funds have the opportunity to withdraw their funds at any time during the life of the fund.
How to choose a mutual fund?
The most common mistake when choosing an investment fund for beginners Russian investors is the fact that they pay attention to the performance of the institution. According to the objective opinion of major players, the amount of profitability is relative, since it is predicted, not calculated. Using this approach in choosing a fund, there is a high probability of investing in a mutual fund with an aggressive strategy, which will be able to show stable high results only as an exception.
According to experts, when choosing a fund, it is important to proceed from the tasks, goals and priorities in investment activity. In view of this, consider the aspects that should influence the choice of the investor:
- The main goal of any investment activity is to make a profit. If the focus of the goal is a large income, it must be borne in mind that it will necessarily be associated with large risks of losing the money invested. If you want to minimize possible losses, investors need to focus on equity funds. If you want to minimize risks, bond funds are perfect.
- Timing of investment. Speaking of short-term investments, you will have to choose between bond funds and money market funds. More long-term investments possible in real estate funds or stocks.
- The amount of capital. The main rule: the smaller the amount of investments, the narrower the range of possible mutual funds for choosing. Usually, minimum amounts for contributions invest in money market, stocks and mixed funds.
- Rating. The Internet is replete with all kinds of mutual fund ratings, depending on various criteria - profitability, asset volumes, funds raised, etc. When choosing between them, use only trusted and reputable sources.
- Having a license. Before investing, read the documents of the fund you have chosen, its license for investment activity. Be sure to check the existence of the Trust Rules.
In any case, regardless of the fund you choose, you must be aware of the essence of your actions, taking into account the possible consequences listed above. Without understanding the working mechanisms, entry conditions, management control schemes, there will be no point in investing in any fund. By studying the details of the activities of mutual funds and choosing several investment funds for investments, you will create conditions under which your capital will definitely make a profit, even if investments are made in the simplest, but conservative and reliable mutual funds.
Over the past twenty years, mutual funds have found wide popularity in Russia and have developed quite strongly. Each of the mutual funds differs in its scheme of work and offers shareholders a wide range of returns, depending on the risks. The higher the yield offered by the mutual fund, the greater the risk the client of the fund should expect, but this is not always the case. In general, mutual funds have proven to be a very good form of investing money, attracting more and more people over time.
The amount of the minimum deposit usually varies from several thousand to several hundred thousand, depending on which audience of investors the investment is intended for. fund. The most popular investment funds allow you to make a minimum contribution, starting from several thousand rubles, while the upper ceiling is usually not indicated. If the holder of a share (a security certifying the holder's right to a part of the stock property) wants to withdraw his funds, this can be done by selling the share.
The legislation of the Russian Federation prohibits mutual investment funds from advertising the expected income to future shareholders, promising them untold profits. The effectiveness of a mutual fund can usually be seen from the published past results, already on their basis, the investor draws conclusions about whether it is worth investing in this fund. Obviously, the most popular funds are those that have been afloat for more than a year and do not allow losing share contributions of their investors.
Answering the question of what mutual funds are in general, you can get by with just a couple of words. A mutual investment fund is an association of several investors, by means of which a manager-specialist invests in securities. Income grows based on the change in the value of the security and can vary in the range of values where the upper limit is not outlined. Since there are risks of depreciation of the paper, each of the mutual funds seeks to reduce its dependence on such securities by investing investors' funds in many sources of income at once, that is, by diversifying investments. Further about everything in more detail.
What is a mutual fund?
From a legal point of view, a mutual investment fund can be defined as a property complex without the organization of a legal entity, built on the trust management of the property of a mutual fund by a specialized management company (the management company is the brain of the entire fund) in order to increase the value of the fund's property. The increase in the property of the fund is achieved by investing money in certain industries - technologies, stocks, bonds, real estate) Thus, such a fund is formed from the money of investors (shareholders). Each investor owns a specific number of shares in the property of the fund. An investment share is a security owned by an investor, which certifies the owner's right to a specific share in the fund's property. One investor can have several shares at once. Thus, an investment share also grants its owner the right to receive from a mutual fund cash corresponding to this share. The share in the property of the investment fund depends on the size of the share contribution, minimum size which varies over a fairly wide range, but in an open type of funds it usually amounts to several thousand rubles.
Several organizations participate in the work of the investment fund. The brain of the entire fund is the management company. It is she who is responsible with her property for the slightest violations on the part of the fund. All transactions are carried out there and when suspicious transactions appear, everything is blocked by the depository.
The second participant of the fund is a specialized registrar. It takes into account the rights of contributors (shareholders) to a part of the property in a mutual investment fund using a special register. This register records all information about the owners of shares and their share in the ownership of the fund.
The third participant is the auditor. He monitors the correctness of the reporting of the management company, making sure that the reporting is built in accordance with all the rules. All auditors are licensed by the Ministry of Finance.
Advantages of investing in mutual funds
The effectiveness of the fund's investments can be assessed by past achievements, but it is forbidden in Russia to advertise the expected profitability of investment funds. The head of the Federal Financial Markets Service of the Russian Federation spoke about this, pointing out the similarity of the exchange game and mutual funds and stating that shareholders (fund investors) must withstand without panic up to 50% of the fund's losses.
When evaluating the performance of a fund, one usually compares the actual return with the potential return.
Each fund is audited by the state for the presence of certificates of the Federal Market Commission valuable papers from specialists. An investor does not trust his investments to incompetent specialists, but invests them in the management of competent and professional managers. Also, each of the funds goes through a rather strict licensing process. Moreover, control by state structures is carried out even during the operation of the fund, but sometimes this is also the disadvantage of investing in mutual funds, because often the state limits what stocks and bonds a fund manager can buy, thus minimizing risks, but saving investors from the opportunity to receive high interest. Rather, private investors win here, who are not limited in their freedom to invest clients' money.
According to many experts, mutual funds are a more profitable investment option than bank deposits so when considering investments, always think of mutual funds.
Mutual funds guarantee a higher yield compared to the typical investment instrument of the majority of the population - bank deposits. Often, the risks even come close to the risks of bank deposits, because even at the moments of unprofitable operation of the fund, the depositors' money does not burn out, but is transferred to another management company.
In Russia, the most popular investment funds are distinguished by a low entry threshold, starting from as early as 1,000 rubles, despite the myths that you can invest in such funds from almost hundreds of thousands of rubles. The upper limit is not defined.
To date, according to the National League of Managers, the price net assets of all existing mutual funds in Russia is approximately 500,000,000,000 rubles. Of these, open funds own 104 billion rubles, closed funds 365 billion, and interval funds 38 billion rubles. The number of operating mutual funds is approximately 1100, the number of emerging ones is 19, and the number of management companies is 287.
Benefits of investing in mutual funds
- Your money is managed by highly qualified specialists with a certificate of the Federal Commission on the Securities Market, and a whole staff. All this speaks of minimizing risks and reliability. The funds are also licensed and their activities are controlled by the state.
- Good conditions investment. An investor can enter the club at any time (except for closed and interval funds) and leave it, for example, by selling a share to another investor.
- An opportunity to study the profitable history of most of the most reliable and popular funds. Based on previous results, you decide whether to invest in this fund.
- Favorable taxation system. This means that you are not required to pay a percentage of the annual profit, although once a year you will have to pay a fee to the fund, even in those moments when the fund suffers losses. However, this can be considered both a plus and a minus.
- Mutual funds have earned their attention from investors for many years of work, providing them with high returns and minimizing risks. This respect on the part of contributors did not appear just like that, but was backed up by actual results. Definitely, mutual funds should be considered when deciding whether to invest free funds.
Disadvantages of investing in mutual funds
In the Russian Federation, this type of organization has been operating since the mid-90s and since then they have been able to earn the trust of people as one of effective options investing in risk-return ratio. However, as in any other type of investment, you should carefully study the information about the fund where you want to invest your free funds, because there are big risks. Mutual funds do not apply to instruments with fixed profitability and legal return of funds in case of their loss by the fund. In the role of such an instrument, bank deposits with a fixed annual return or investing in high-grade bonds.
When investing money, you should not count on instant profit out of thin air. Investing in mutual funds is a choice for the patient, as are bank deposits. Actually high yield is provided only in the long term, often before you get a high profit you have to wait up to several years.
However, it is worth noting that there are mutual funds that invest exclusively in bank deposits and high-rated bonds. This type of funds is distinguished by a low degree of risk due to its diversification, even in comparison with many bank deposits.
As mentioned earlier, the activities of the fund are constantly supervised by government agencies and often they also impose restrictions on the purchase of bonds and shares by the management company. This step minimizes risks, but limits the ability of investors to receive high returns in a short time. In this regard, the alternative is a private investor, in no way limited in the freedom to manage the money of contributors.
In summary, the main disadvantages of mutual funds can be noted:
- The presence of risk. Yes, in life you rarely meet stability and reliability, but it’s not for nothing that most people prefer bank deposits to mutual funds. Each of the investors can both earn well and earn nothing, and least of all - lose money at all.
- Mutual funds are organizations that generate income in a fairly long term, within a few years.
- Funds do not work for free and sometimes you need to pay a fixed fee. Even when the fund suffers losses.
What are mutual funds
Considering the whole variety of types of mutual funds should be based on several criteria:
- The degree of accessibility (openness).
There are 3 types of funds: open, closed and interval.
- Open funds function and work every business day, the most public and popular type of funds with the lowest entry threshold. Investment units are distributed and redeemed every working day. The main assets of open funds are usually highly liquid securities and stocks, that is, those that can be quickly sold at a price close to the market. "Liquid" means flowing into money.
- In closed-end funds, units are issued during the formation of the organization, and are redeemed only after the end of its term of operation. Most often, such funds are organized for specific projects. To date, this type of funds have the highest total asset value. Most often, they differ in the most advantageous offer in relation to the investor, but the number of shares is limited.
- Interval funds accept shares at fixed intervals, usually two or three per year for two weeks. Here, the main assets are the opposite of open ones - securities with low liquidity.
- Direction of investment.
This point is a little more difficult.
According to the direction of investments, funds are divided into:
- Money market funds - invest mainly in short-term deposits - bills of exchange, certificates of deposit, etc.
- Bond funds - invest in bonds and, most often, government bonds, as they are the most reliable. Bonds provide a company with a monthly income.
- Equity funds are a fairly popular type of investment, as stocks provide high returns. There is a factor high risk because the value of shares fluctuates greatly depending on the situation on the market.
- Mixed investment funds - There is no need to explain much here, such funds use bonds, stocks, and certificates of deposit in their work. The advantage of these funds is both a reliable monthly income from bonds, and high returns with high risk from stocks.
- Funds of funds - the funds of contributors are invested in other funds, thanks to which the minimization of risks and reliable returns are achieved.
It is worth noting that there are several more popular related types of funds.
Retirees who invest in stocks and bonds. The duration of the investment depends on the age of the investor. Such funds provide up to 10% per annum after the investor retires.
Guaranteed funds that invest only in areas that bring high returns with minimal risk. Provides very high returns over really long investment periods (5-15 years)
There are many other types of funds related in their direction of investment, but they should not be considered all, since they are quite rare.
Rating of the most profitable mutual funds in Russia
- April Capital - shares of commodity companies. Growth from 03/31/17 to 03/31/18 - 39.47%
- Sberbank - Global Internet. Growth from 03/31/17 to 03/31/18 - 38.53%
- April Capital - shares. Growth from 03/31/17 to 03/31/18 - 34.57
- Alpha - Technology Capital. Growth from 03/31/17 to 03/31/18 - 32.05%
- VTB - BRIC. Growth from 03/31/17 to 03/31/18 - 30.90%
- RAIFFEISEN - Information Technology. Growth from 03/31/17 to 03/31/18 - 31.03%
Subsidiary funds of the same management companies were not repeated.
Already on the basis of this list, you can make a competent contribution that will bring you hundreds of percent per annum in the long run.
If we consider management companies, then the first place will be occupied by subsidiaries, the organizer of which is Sberbank. This is the choice for those who are looking for reliable investments with low risk. The maximum yield here is 25% per annum.
Second place is occupied by mutual investment funds managed by the German company Raiffeisen. The middle segment in the "Risk - return" ratio. The average yield over the year is approximately 40%.
The third place in the TOP funds of the best management companies is occupied by a group of subsidiaries of the Trust Investment Company. The profitability is 50-60%, and the period of work for more than ten years deserves the attention and popularity of this company.
When choosing a mutual fund, always try to study the history of its income to the maximum. Obviously, it is worth giving preference to organizations that have been operating on the market for more than 5-10 years. Young funds are formed and disappear with great speed, and only a few remain afloat. Often, young organizations offer contributors more favorable interest. This can both play into the hands of the investor, and play a cruel joke with him,
- equity funds;
- bond funds;
- mixed investment funds;
- index funds;
- money market funds;
- funds of funds;
- real estate funds;
- funds of particularly risky (venture) investments;
- mortgage funds;
- direct investment funds.
(Funds belonging to the last four groups can be only in the form of closed funds).
The full name of the fund must indicate what kind of fund it is - a stock fund, a bond fund, or any other of those listed.
Equity funds, bond funds and mixed funds- the most common funds. It is these three types of funds that are most widely used on the Russian stock market. The names speak of the investment objects of these funds. However, this does not mean that the investment portfolios of these funds should contain either only stocks or only bonds. Equity funds must invest at least 50% of assets in stocks, while no more than 40% of assets can be invested in bonds. For bond funds, accordingly, the opposite is true - at least 50% of all funds must be invested in bonds and at the same time no more than 40% - in shares. In mixed investment funds, the ratio of stocks and bonds can be any.
Investment strategies of these three types of funds clearly visible on the graph. Equity funds are characterized by high profitability and at the same time a high probability of incurring losses, which is associated with the changeable conditions of the stock market. Bond funds, by contrast, are conservative. They allow you to receive a stable yield with a very small risk of a drop in the value of the units. Mixed investment funds, which have both stocks and bonds in their portfolios, as a rule, represent an average option in terms of return and risk.
Let's take a closer look at these three types of funds. Depending on which particular securities funds are invested in, funds even within these groups may differ in their investment strategies.
Almost all funds invest in " blue chips"- shares of several largest companies, but there are exceptions. For example, equity funds can be second-tier equity funds if investments are made mainly in less than liquid shares issuers of small capitalization (they are called shares of the second tier). An equity fund can be sectoral if the assets are invested in securities of companies belonging to the same industry. For example, a fund for the oil and gas industry, a fund for the electric power industry, telecommunications, metallurgy, etc. There is a fund that invests mainly in shares of companies with state participation (where the state owns at least 25% of the company). Or a dividend stock fund.
Even bond funds may vary - government securities funds, "junk" bond funds (these are high-yield bonds that belong to the risky group).
All these are different strategies that management companies can offer for stock funds, bond funds, mixed investment funds.
Index funds
These funds are composed entirely of shares, and the fund portfolio includes the same shares and in the same proportion as for the calculation of indices. stock market, for example, the MICEX Index.
Why are such funds created? It has been historically proven that it is quite difficult for a stock fund to outperform the market itself (that is, stock market indices) over long periods of time. Then why try to beat the market when you can invest directly in the index and get market returns. Unit value dynamics index fund exactly repeats the dynamics of the index (see figure).
The advantage of this fund is low management costs (management as such is not required from the management company, it is only necessary to maintain a portfolio structure similar to the index; therefore, the costs are low). As a result, in the long term, due to low costs, the return of an index fund can exceed the return of a stock fund. The profitability of an index fund does not depend on the mistakes and miscalculations of the manager. And finally, you can always be in the know by simply keeping track of the stock index to which the fund is linked.
The downside of this fund is that during a bear market, the fund's share will inevitably fall with the index - just as deep. That is why it is recommended to invest in this fund for the long term - from three to five years or longer, when the general market upturn compensates for temporary downturns in the market.
money market funds
The yield of money market funds is low - at the level of a bank term deposit. But such funds, unlike time deposits, have an advantage - namely, liquidity. A share of a money market fund can be redeemed at any time without any expenses (discounts, surcharges).
Suppose you have in your hands the amount that in three months you must spend on buying an apartment. During this period, you will not receive anything from the bank (you will not be able to withdraw from a term deposit without losing interest). There is a way out - to put in a money market fund, where the yield will approximately correspond to a bank term deposit.
Money market funds' assets are invested in bank deposits (at least 50% of assets), short-term bonds and other money market instruments. These funds are even more reliable and conservative than bond funds.
Funds of funds
These funds do not invest in stocks or bonds, but in shares of other mutual funds! The risk of unsuccessful investment of your funds by fund managers can be reduced by spreading funds among several mutual funds. This is actually what the funds of funds do. They buy shares of successful management companies that have proven their professionalism in asset management in practice. All you have to do is buy a share of one fund...
The disadvantage of this fund is the possible higher management costs, which are passed on to the shareholder.
Real estate funds, high-risk (venture) investment funds, mortgage funds, direct investment funds, as noted above, can only be created in the form of closed-end funds. This means that you can purchase a share only when the fund is formed, and redeem it only a few years after the end of the fund (closed-end funds are created for a period of one year). As a rule, these funds are not created for small private investors - the minimum investment amounts here can be millions of rubles.
As the names suggest, real estate funds invest in the construction of commercial and residential real estate, or earn money by renting out real estate; mortgage funds invest in monetary claims on obligations secured by mortgage; venture funds finance various commercial projects; the assets of direct investment funds include shares that have not been listed on stock exchanges, in the amount of at least 50% of the volume of placed joint stock company securities plus one share, and the funds will always be the majority shareholders.