Mutual Fund: Definition And Type


Mutual Fund: Definition And Type

 Mutual funds ( mutual funds ) is a collection of funds from the community, the investors or the investors to be managed by the Investment Manager and invested in various types of securities investment portfolio or other financial products. According to the financial dictionary, the Investment Fund is identified as a portfolio of diversified financial assets, listed as an open investment company, selling shares to the public with the offer price and withdrawal at the price of its net asset value. Type of mutual fund based on the nature of the investment: • Growth Fund: This mutual fund has an investment portfolio that aims to achieve high-profit growth. This type of investment has a fairly high volatility, such as investing in stock instruments. • Stable Fund: This mutual fund focuses on the type of investment portfolio that aims to achieve stable profit growth. The type of investment has a somewhat less volatile nature, such as investment in bond instruments. • Safty Fund: This Mutual Fund prefers the security of investment funds and dislikes the price volatility or income instability of its investment instruments. Investment Managers of "safety fund" mutual funds tend to do investments in money market instruments, such as deposits. According to the type of mutual funds can be divided into 4 parts, namely:

1. Stock Mutual Funds
Mutual Fund: Definition And Type

 • Mutual funds Shares are mutual funds whose investment portfolio is in equity instruments with a total of at least 80% (eighty percent) of their total investment assets. • Investment managers who make purchases on these stock instruments typically always make a selection on "blue chip" stocks and on liquid stocks. • Investments in stocks are at high risk but result in high returns.

2. Money Market Mutual Funds



• This Mutual Fund makes an investment choice on the type of money market investment instrument with maturities of less than 1 (one) year. • The attractiveness of investment instruments in the money market is due to its very liquid nature. • Money Market Mutual Funds have a lower risk level than other types of investment instruments.

 3. Fixed Income Fund
Mutual Fund: Definition And Type

 • This mutual fund has a type of investment portfolio in securities in the form of bonds, such as bonds with a composition of at least 80% (eighty percent) of total assets. • Fixed income instruments, such as bonds, provide relatively attractive interest rates (coupons) in comparison to investments in deposits.

4. Mixed Mutual Funds
• This type of mutual fund allocates its investment funds in the form of a varied investment portfolio (the type of mixed investment instrument). • The investment instrument may be in the form of shares and combined with fixed income instruments (bonds).

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