- A mutual fund is an investment vehicle similar to a basket packed with a varied class of assets. You and other investors can place some money to purchase a portion of assets in the basket. The assets have been expertly designed to meet certain investment objectives.
- Every mutual fund has a clear investment objective and guidelines on how to achieve the objective.
- For further information on mutual funds, please visit our Investment Plans page.
Below are several of the advantages of investing in mutual fund:
- Manage by professional team
You do not need to manage your investment by yourself since a team of professional and experienced investment manager supported by in-depth research will do the job for you.
- An affordable investment value
No hefty capital needed to invest in a mutual fund product; you’ll be in business with initial capital as little as Rp 50,000. For further information, see your fund manager or selling agent.
- Diversified portfolios
While the value of a mutual fund investment is minimal, it opens the door to a diverse assortment of assets packaged in a mutual fund portfolio managed by a fund manager. Holding diversified assets can minimize the risk of capital market investments.
- The ease of transactions
Making mutual fund transactions is as easy as making banking transactions. The process of opening your mutual fund account to an initial subscription of investment units is an absolute no-brainer. A mutual fund product is highly liquid and redeemable when one’s faced with the need for some quick cash. What’s more, you can easily switch from one mutual fund product to another pursuant to an agreement entered into.
Below are several of the risks associated with mutual fund investments:
- A reduction in Net Asset Value (NAV)
The risk of a reduction in NAV stems from a decrease in the prices of assets of a mutual fund portfolio. Below are several of the factors contributing to a decrease in the value of a mutual fund portfolio:
- Underperformance of listed companies
- National and global economic situations, such as higher inflation rates, an increase in benchmark interest rate and current account deficit
- Non-conducive political stability
- Social conditions, such as natural disasters and social unrest
- A default
The risk of a default stems from the failure of a party in a mutual fund transaction to meet the legal obligation to another party as stipulated in the contract, resulting in the loss of investment value. To prevent this from ever befalling you, seek as much information as you can about the issuing fund manager and custodian banks.
The risk of liquidity stems from the failure of a fund manager to deliver investment returns. Non-liquid assets or securities in a mutual fund portfolio will make it difficult for a fund manager to redeem them, which may result in delayed payment of returns to investors. Moreover, in the event of a force majeure, the redemption of investment units of a mutual fund product is subject to a temporary suspension.
PT Mandiri Manajemen Investasi, or better known as Mandiri Investasi, is a corporate entity in Indonesia and a business unit of Mandiri Group. Mandiri Investasi has been in the business of investment portfolio management since 1993. Below are the types of mutual funds issued by Mandiri Investasi:
- Money Market Fund
- Fixed Income Fund
- Balanced Fund
- Equity Fund
- Protected Funds
Before embarking upon a description of the role played by an investment manager, it would be advisable to note that a mutual fund is an investment product that builds on a collective investment scheme (KIK) entered into by a Fund Manager and Custodian Banks. An investment manager (or an investment adviser) is responsible for managing pooled investment of funds and investing them in diverse securities portfolios, including stocks, bonds and money market. A custodian bank, whose present service is still within the boundary of banking services, are responsible for keeping investment portfolios of investors and for the settlement of mutual fund transactions and administration. The segregated role between an investment manager and custodian bank is aimed at protecting investor’s mutual fund investments.
In order to know the type of mutual fund that suits you best, you need to be aware of your investment objectives and investment risk profile. Below are three types of investment risk profiles:
Investors with this type of risk profile tend to opt for highly secure investment instruments that generate predetermined returns, such as bank deposits, and will allocate only a small portion of their investment assets for instruments that pose a higher risk of losses, such as bonds or stocks.
While investors with this type of risk profile are more willing to take greater risks, they exercise caution in choosing investment instruments and are leery of investing in risky instruments.
Investors with this type of risk profile are audacious enough to allocate a large portion of their investment funds in risky instruments.
For more information on your investment risk profile, please visit our Investment Calculator page. Should risk profiles cease being an issue for you, please continue to our Know Your Needs and Goals page.
You can measure the performance of mutual fund via the Fund Fact Sheet released monthly by investment managers.
You can find information on mutual fund fees in the prospectuses for the products. In general, mutual fund fees include:
- A subscription fee for subscription transactions
- A redemption fee for redemption transactions
- A switching fee for switching transactions
You can make subscription, redemption and switching transactions at a time determined by the bourse calendar.
Mutual fund not subject to taxes.
You can monitor your mutual fund investments via a Mutual Fund Monthly Report and Transaction Confirmation Report. These two reports will be delivered directly by custodian banks to the correspondence addresses of investors over a maximum period of T+12 at the end of every month for the Mutual Fund Monthly Report and over a maximum period of T+7 after a transaction date for the Transaction Confirmation Report.