Mutual funds are investment products created to provide a variety of options that offer incentives for higher returns, providing a low to high risk, giving greater security because the money is not invested directly in a product but a number of products that make up a fund. Also worth noting that mutual funds are not a “legal person” and the law defines as a property of many beneficiaries. The assets are the assets of a fund consists of securities and cash. Mutual funds can be distinguished either by the size of the risk may be from almost zero to very high, or the nature of time may be from short to long period, or the type of products that can be management reverse funds, bonds, mixed, equity / share, or funds to funds.
MANAGEMENT REVERSE FUNDS
Are mutual funds which provide efficient management of short-term capital in order to achieve competitive performance compared to ordinary savings accounts, with almost zero risk. The largest proportion of money invested in money market products (typically more than 65%) and the remainder in long-term fixed income securities. The money market products and long-term fixed income securities may vary from fund to fund. Aimed at conservative investors with short investment horizon who are willing to exploit the high interest rates during periods of currency markets, while avoiding the price fluctuations of bonds and shares.
These are mutual funds that offer higher returns compared with investments of money in deposits with a traditional interest rate and low risk. The money invested 65% in long-term fixed income securities. Aimed at conservative investors who mainly want to protect their capital and ensure a stable income. Furthermore, targeting both moderate and aggressive investors who want to reduce the total committed investment risk, through the wide dispersal of the chapter (creation a portfolio of bond and equity funds).
These are mutual funds that give the opportunity to achieve even higher yields compared to traditional deposits but with moderate risk because more money is invested in long-term fixed income securities and shares (less than 65%) and less on products of money. Aimed at investors who have the medium term and want to exploit the profit opportunities that are presented in equity and bond markets, while willing to take medium-level risk. Moreover, targeted at those who wish to achieve good dispersion of ownership, with a single placement.
Are the funds designated for the easy and direct access to local and international stock exchanges, the possibility of achieving high returns over time, reducing the investment risk due to wide dispersion, immediate liquidity and professional management in an area that requires specialist knowledge and experience. Most of the money invested in equities (domestic or foreign) and is aimed at investors with long-term investment horizon who want to maximize the return on their money while they are prepared to take the corresponding high investment risk.
FUNDS TO FUNDS
Are mutual funds which invest their assets in shares of the best bond, equity and mixed funds. Until now we met the simply mutual funds which consist of several products of the market (deposits, bonds, shares). Now, we meet funds to funds which consist of the best mutual funds in its category by reducing the risk of losing even more, while seeking to achieve even higher yields. Aimed at conservative investors who want to gain competitive returns compared to traditional investments, and investors who want to achieve medium high yields.
Remember: Mutual funds are not guaranteed and the past performance does not guarantee the future.