in the past few years The popularity of mutual funds as investment tools has skyrocketed in response to the growing awareness of Indonesians about finance. not to mention There are now many applications that can be used to purchase this single instrument.
Mutual funds are envisioned to be a suitable tool for beginners as they offer ease of investment in terms of method and management. You should know in advance what mutual fund investing is and how the following mutual funds work:
Summary of investment in mutual funds
Mutual Fund (mutual fund) is an investment tool with the concept of public investment containers. by collecting money from investors and distributing them to other instruments such as stocks, bonds, deposits, etc.
Ligwina Hananto in shared content Raditya Dika on YouTube This tool is like a fruit salad. in this comparison He compared stocks, bonds and other investment instruments. that is a fruit that is a component of fruit salad
Instead of buying individual pieces (stocks, bonds, etc.) and processing them yourself. Mutual funds allow investors to enjoy knowledge (investments) provided by expert sellers. (Investment managers) This is beneficial to those who are unable to independently manage their investments.
Mutual funds are divided into several types, including:
- Money Market Fund (RDPU): Instruments that allocate most of their investments to financial products such as fixed deposits, special savings accounts, etc.
- Equity Fund (RDS): An instrument that allocates most of its investments to buy shares of companies listed on the stock exchange.
- Mutual Fund Index (RD Index): Similar to RDS, but only for stocks that enter a certain index. For example, the BNI-AM IDX30 is specifically for stocks included in the IDX30 index.
- Fixed Income Fund (RDO): Most investment allocation instruments are purchases of government bonds or corporate bonds.
- Shariah Mutual Fund: An instrument that has allocated all investments for Islamic securities, be it Sukuk or stocks.
- Special Mutual Funds: These are mutual funds with special characteristics such as the Global Fund (USD securities) and the Endowment Fund (a mutual fund with a portion of the profits donated).
How to invest in mutual funds
Here’s how money markets and other mutual funds work:
1. Investors open a securities account
Securities account and SID (Single investor ID card) This can be done by filing certain documents directly at the securities company. or by using a mutual fund agent application (APERT). Many banks also offer securities purchase services. This includes mutual funds.
2. Investors choose mutual fund products
Mutual funds also have a brand! This mutual fund brand usually contains the name of the investment management company that issued it. Mutual fund type (stocks, bonds, etc.) and additional names. For example, Sucorinvest Sharia Money Market Fund is a Sharia money market fund product managed by Sucorinvest Asset Management.
Investbro sums it up. Mutual fund products from the best investment managers. that you can take into account
3. Investors buy the desired mutual fund investment units.
The next step is for investors to buy the mutual funds they want. Currently, this tool can be purchased for a minimum fee of 10,000 IDR, although investment managers set a minimum purchase of 1,000,000 IDR for the mutual funds they manage. Please choose according to your budget.
In this way, investors make indirect deposits for the investment manager to manage. Please note that the investment manager is only responsible for managing the investor’s money. The department that maintains and maintains the money is Custodian Bank.
4. Mutual funds are managed by an investment manager.
After the investor has deposited money It is now the duty of the investment manager to manage the money. Investment managers can actively and patiently manage mutual funds as needed. This is called active if the investment manager tends to sell and buy the underlying securities of the instrument.
For example, stock mutual fund products include AAPL, TSLA and NFLX stocks. It is said that investment managers are active if in a month they buy AAPL, TSLA and NFLX shares several times and resell them.
Typically, actively engaged investment managers charge investors a high percentage of management fees (expense ratio). Information about expense ratio You can find this information in the mutual fund broker application you use or in the fund information sheet for each mutual fund product.
5. Investors benefit from the investment.
Profits from investing in mutual funds can be obtained from 3 sources: investment profits. (the difference between the purchase price and the selling price of this instrument) from the dividend paid by the Company (for stock funds) and from coupons issued by the issuer of bonds (bonds, mutual funds). .
A mutual fund’s price is obtained by dividing the net asset value (NAV) of the relevant mutual fund and the number of mutual fund products in the market. For example, Investment Manager A manages RDS called RDS A if the number of RDS A in circulation is 1,000. unit and total NAV is 700,000. The price of RDS A in the current market is 700,000/1,000 or 700 rupiah .
This NAV value will fluctuate according to the volatility of securities prices in the relevant mutual fund group. The difference is that the NAV value does not immediately fluctuate when the security price changes. but is set at the end of trading hours on the exchange (InvestopediaTherefore, one of the advantages of investing in mutual funds is that the price is relatively stable.
Tips for choosing to invest in mutual funds
Like any other investment tool, mutual fund selection cannot be random. You have to choose the right investment tool. Tips for choosing to invest in mutual funds are as follows:
1. Choose according to your investment objectives and risk profile.
Today, there are many mutual fund brokerage apps that offer expert advisors to help investors choose the right product for their investment objectives and risk appetite. However, you are also free to customize your investment product.
2. Choose a product from a reliable and legal investment management company.
The investment manager’s legitimacy information can be found on the OJK official website while for reliability. You can measure the credibility of this company with the following variables:
- NAV Volume The higher the NAV, the more people trust this investment manager.
- score expense ratio. The lower the value of the expense ratio, the better. The more efficient the investment manager, the more efficient it is.
- Looking for news about relevant investment managers.
for the first and second points The app provides shortcuts that you can use to sort the manager company with the highest and lowest NAV and expense ratios.
3. Read the mutual fund information sheet.
True to its name, Fund Information Sheet It is a document that contains important information about mutual funds. From this monthly update worksheet You can get the following information:
- investment manager name
- Changes in mutual fund prices during the past 1 year
- Total NAV Value
- total expense ratio
- Name of the custodian bank
- A mutual fund’s investment allocation data starts with the percentage that the issuer receives the investment from the product.
This document is usually available in all mutual fund product views in the app. If not, you can find it on the relevant investment manager’s official website.
to understand must know How to read the mutual fund information sheet so that you can explore the information in it.
Do you understand how mutual funds work? Let’s start investing.