About Mutual Funds
Mutual funds are a collective investment vehicle managed by a legal entity known as an Investment Manager, to subsequently be invested in securities such as stocks, bonds, and money market instruments.
The legal forms of mutual funds can be in the form of a Corporation or in the form of a Collective Investment Contract (KIK). Additionally, mutual funds can be categorized into two types, namely Closed-End Mutual Funds and Open-End Mutual Funds. In their development, the most prevalent type of mutual fund in Indonesia is in the form of a Collective Investment Contract (KIK) and is open-ended in nature.
An Open-End Mutual Fund is a mutual fund that can be bought and sold at any time during the trading day.
Investment products like mutual funds are highly suitable for investors who face various limitations, such as limited time, restricted funds, limited information, and limited investment knowledge. Additionally, these instruments can also help mitigate investment risks by diversifying across various investment products. However, it doesn't mean that mutual funds are entirely risk-free. Therefore, investors still need to study the various risks associated with these products.
Mutual funds themselves have various types of products, namely:
- Money Market Mutual Fund
This type of mutual fund has a 100% investment policy in money market instruments or securities with a maturity of less than 1 year. It is suitable for short-term financial goals (less than 1 year) or for investors with a very conservative profile. This type of mutual fund has the lowest risk and its returns are relatively smaller.
- Fixed Income Mutual Fund
This type of mutual fund primarily allocates its investments (at least 80%) to fixed-income securities, such as bonds and debt instruments, which provide a stable source of income. It's suitable for achieving financial goals with a time horizon of 1-3 years or for conservative investors.
- Balanced Mutual Fund
Mixed mutual funds have a maximum investment policy of 79% in money market instruments, bonds, and stocks. They are suitable for achieving financial goals with a time horizon of 3-5 years or for investors with a moderate risk profile.
- Equity Mutual Fund
This type of mutual fund has a minimum investment policy of 80% in a single stock instrument. It is suitable for achieving financial goals with a time horizon of more than 5 years or for investors with an aggressive risk profile. Following the principle of high risk, high returns, this mutual fund has the highest risk compared to other mutual funds but also has the highest profit potential.
- Reksa Dana Syariah
Shariah mutual funds are Shariah-compliant versions of the four mutual funds mentioned above, following the rules and principles of Islamic finance in their management.
Mutual funds are products that come with risks. Before purchasing mutual funds, investors should read and understand the prospectus and performance reports of the mutual fund in question. Additionally, it's important to have a good understanding of the company offering the mutual fund.
Mutual Fund risks include at least:
- Risk of reduction in unit value
The securities managed by the Investment Manager in a Mutual Fund can also experience a decrease in their investment value, influenced by developments in the money market and capital market (such as changes in interest rates, falling stock prices, issuer default risks, etc.). As a result, the Net Asset Value (NAV) per unit of the Mutual Fund can also decrease and experience fluctuations. The NAV per unit of the Mutual Fund is also referred to as the Net Asset Value (NAV) per unit.
- Liquidation risk
For Closed-End Mutual Funds, investors cannot sell their investments whenever they want because the sale must be done on the Stock Exchange, depending on the existing demand and supply.
- Management mismanagement
If the Investment Manager is not successful in managing the portfolio of securities, the Net Asset Value (NAV) per unit of the Mutual Fund will also decrease in value.
We have obtained a license from the Financial Services Authority (OJK), indicating that we have met all the necessary requirements and standards to operate in this industry. With a high level of professionalism, we have assisted many of our customers in realizing their dreams. Through the various products and services we offer, we are committed to providing the right and secure investment solutions for every customer. With an official license and proven experience, we are ready to help you achieve your financial goals with confidence and security.
