Mutual Funds - Mutual Fund Investment Tips For Beginners
Illustration Mutual Funds
Netgenz - Stock | Investment is an opportunity to have a prosperous future. Should not wait for old age to start investing, because we will miss a lot of opportunities. Currently, the investment trend is starting to change to mutual fund investment. However, many have difficulty understanding how to invest in mutual funds.
Besides foreigners, many underestimate the understanding of mutual fund investment and immediately pursue it to gain experience in mutual fund investment. It's not wrong indeed, but how will we master something, if we don't understand the meaning first.
Therefore, before entering a review regarding how to invest in mutual funds, it would be wise for us to know in advance whether it is a mutual fund investment before continuing to dive into the mutual fund investment. Nach, this time Qoala will explain the understanding of mutual funds and a guide to getting started with mutual fund investments for those who are just starting out.
What is Mutual Fund Investment?
Literally, Mutual Funds can be concluded as a place that can be used to collect funds from investors for further investment by the Investment Manager in the Impact portfolio. In practice, the Investment Manager works supported by professionals who are experts in investment control.
Generally, these professionals are divided into the Investment Committee and the Investment Management Team. The simple description, we don't need a large capital of up to several tens of millions of rupiah to invest in mutual funds. We need to save some money to buy mutual funds and select the desired mutual fund.
Next, the Investment Manager who wants to take care of our investment, until we get a profit. We should try it immediately after understanding what a mutual fund is, then we will gain experience in mutual fund investment slowly until we really understand it. To support knowledge related to mutual fund investment, here are some types of mutual fund investments that we must recognize.
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Types of Mutual Fund Investment
There are many types of mutual fund investments, even each bank provides mutual fund investment services, starting from BRI mutual fund investments to BCA mutual fund investments. But before knowing in detail how to invest in mutual funds, here are some types of mutual fund investments that we must recognize:
1. Money Market Fund
The first type of mutual fund is money market mutual fund, or what is known by the English term, Money Market Fund. Money market mutual funds are investments that have been made using money market investment instruments. Generally, this type of mutual fund requires less than 1 year.
Instruments traded in money market mutual funds are in the form of time deposits, certificates of deposit, Bank Indonesia Certificates (SBI), and Money Market Securities (SBPU). Money market mutual funds are a type of mutual fund that has a low-risk profile compared to other types of mutual funds.
As beginners, of course, we want a smaller risk. Therefore, investing in money market mutual funds is the type that we can use as beginners.
2. Fixed Income Fund
The second type of mutual fund is regular income mutual funds or fixed-income funds. The risk of these mutual funds is higher than money market mutual funds, that's because this type of mutual fund is really well known and is seen as attractive in the eyes of some investors.
In simple terms, a regular income mutual fund is an investment mutual fund that invests its assets in the form of debt or bonds with a minimum percentage of 80%. This type of mutual fund has a special direction to generate a constant rate of return. Therefore, this type of mutual fund is seen as having a high risk and is very good for some investors.
3. Balanced Mutual Fund
Balance quality funds or combination mutual funds as the next type of mutual fund. Based on the name, this type of mutual fund is a combination of money market mutual funds and regular income mutual funds. A mutual fund investment by distributing investor funds to a combination of bond and stock investment instruments in the investment portfolio.
The advantage of this type of mutual fund is the high percentage of return on capital. In addition, this type of mutual fund carries a high risk, according to the percentage of return on capital.
4. Equity Fund
After knowing the understanding and steps of investing in money market mutual funds, we must know another type of mutual fund, namely stock mutual funds or equity funds. Stock mutual funds as an activity to invest a minimum of 80% of funds into stocks. Among other types of mutual funds, equity funds are the type of mutual funds with the highest risk profile.
Because, this type of mutual fund aims to maintain the development of stock prices in the long term, and generate the highest rate of return. The next type of mutual fund that we must recognize is sharia mutual funds, read the explanation below so that we can know how to invest in sharia mutual funds for beginners.
5. Sharia Mutual Funds
The next type is sharia mutual funds, simply sharia mutual funds as a place to collect people's funds which are regulated by the Investment Manager in the impact portfolio. The difference is, sharia mutual funds use money market instruments that are following the provisions and concepts of Islamic sharia, which are equated with placing funds in Islamic finance concepts, such as sharia shares and Sukuk.
For some business people who hold firmly to the concept of Islam, especially in economic and investment factors, the step of investing in Islamic mutual funds for beginners is an option to take. In addition to prioritizing comfort in faith, several sharia methods are seen as being able to produce blessings in terms of generating profits.
6. Structured Mutual Funds
Apart from the types of mutual funds described above, there are other types of mutual funds, namely designed mutual funds. There are three types of designed mutual funds. Yok, please read the following explanation:
Capital Protected Fund
The first type of mutual fund is a protected fund or capital protected fund. This type of mutual fund has a similar character to deposits, which have a maturity period by dividing profits periodically. And generally have a basic investment value that remains intact, even when the mutual fund is in its prime.
Mutual Funds With Guarantee
Another type of designed mutual fund is a mutual fund with a guarantee. This mutual fund is a type of mutual fund that provides collateral for the initial investment value of the investor. The guarantee or collateral provided is carried out with a guarantee agreement from the insurance company. However, no Investment Manager issues mutual fund products with the type of guaranteed mutual fund.
Index Mutual Fund
The final type of designed mutual fund is the index mutual fund. This type is a mutual fund with an investment portfolio that refers to the index. The index is used as a reference for mutual fund work. Investment managers can use a stock index or a bond index in their mutual fund settings.
For example, suppose an investment manager chooses the LQ 45 index which contains 45 several liquid stocks in the impact, Therefore the contents of the index mutual fund are imitations of several stocks at LQ 45. Possibly, some of us are impatient to make mutual fund investment steps after reading the information above. Especially for those who want to try it for the first time.
Mutual Fund Investment Steps For Beginners
Then, what are the guidelines for mutual fund investment steps for those who are just starting out that you can do? Yok, let's just read the narrative below.
1. Understand How SJ Mutual Funds Work
The first step in the mutual fund investment step, especially for beginners, is to understand how mutual funds work. The advantage of mutual funds is that there is an investment classification, where each investment will be divided into several instruments. So that investment is not only included in one company but in some companies and instruments.
This is a mutual fund action step, we need to know so that we can make good mutual fund investment steps and get the expected profit. But, it must be remembered, profit is not one-way. We need to define the direction to invest in mutual funds.
2. Determine Investment Goals
Get profit as a direction from an investment, including mutual fund investment. However, reiterate our direction of investing in mutual funds. Is it a long-term investment or a short-term investment? If this direction is clear, we can begin to determine some steps to be implemented. Because this direction is related to the benefits we need, according to the direction to be achieved.
3. Know the Types of Mutual Funds
An important way that is important and must be carried out in the mutual fund investment step for those who are just starting out is to know and understand several types of mutual funds. In the explanation above, it has been explained what several types of mutual funds are. Actually, this side is no longer a problem. We need to choose and determine mutual funds that suit our strengths and needs.
4. Choose Mutual Funds According to Ability and Needs
What are the steps to invest in money market mutual funds as mutual funds that we need? Or even sharia mutual funds that suit our strengths and needs? This question is definitely not difficult for us to determine if we already know some types of mutual funds and the direction we are going to invest in mutual funds.
However, one thing that is important to pay attention to when choosing mutual funds according to strengths and needs, namely by understanding ourselves and all the things we can do and will produce what we need.
5. Understand Mutual Fund Terms
Many terms need to be understood in mutual funds. Here are the terms that we must know and recognize:
- NAV/Net Asset Value: NAV or net asset value as the total assets of the mutual fund after deducting all liabilities that the mutual fund needs to pay. NAB is often referred to as NAV or net asset values in English.
- NAV/Unit: We can get the NAV/unit by dividing the total NAV of the mutual fund after it has been divided by the total number of introductory units of mutual funds that are spread out. The NAV movement of mutual funds per unit provides mutual fund performance.
- Mutual Fund Issuance Date: A mutual fund launch date, or first net asset value date.
- Mutual Fund Efficient Date: A date when the mutual fund receives efficient recognition from the OJK (financial services authority).
- KIK (Collective Investment Contract): A contract between the Investment Manager and the Custodian Bank with legal force. KIK binds between the holders of the introductory unit and decides the power of the Investment Manager to manage the group investment portfolio and the power of the custodian bank.
- Custodian Bank: A commercial bank that has obtained an agreement from OJK as a Custodian Bank. Custodian Bank provides custody services for impacts and other assets related to impacts with other services.
- Investment Manager: The faction that professionally manages mutual funds. The investment Manager must obtain permission from OJK to work. Currently, there are around 97 existing Investment Managers who have obtained permits from the OJK.
- WMI (Vice Investment Manager: A person or individual who has obtained permission from the OJK to take action as a representative of the needs of impacted companies that carry out business activities as Investment Managers.
- Selling Agent (APERD): A faction that obtained a license as a mutual fund selling agent (APERD) from the OJK, and officially works together with the Investment Manager to distribute mutual funds.
- WAPERD (Vice Mutual Fund Impact Selling Agent): A faction that obtained a license as a mutual fund selling agent from OJK. Usually, WAPERDs work at APERD or at a mutual fund selling agent, such as a bank, for example.
- Investment Regulations: Several regulations that contain provisions regarding where and how much investor funds collected in mutual funds can be invested by the Investment Manager.
- Complete Application: A condition when all required forms and documents are complete and ready to be processed for purchase or marketing or transfer.
- Good Fund: A situation when investor funds for the purchase of mutual funds are deposited and received in the same mutual fund account according to the time limit that has been set.
- Switching: Also known as mutual fund unit switching, it can be done on an exchange day. If a directional mutual fund has a transition feature, then the investor must provide the form and completeness according to the current cut-off time.
- Redemption: Also known as mutual fund unit marketing, it can be executed on an exchange day. To be processed, therefore, investors must provide a marketing form and its completeness according to the current cut-off time.
- Subscription: Also known as the purchase of a mutual fund unit, it can be done on an exchange day. To be processed, each investor must provide a purchase form and its completeness, and provide purchase funds to mutual fund consumers according to the cut-off time that has been set.
- Fund Fact Sheet: Monthly performance report of mutual funds circulated by the Investment Manager.
- Assets Under Management (Dana Urus Mutual Funds): Some of the investor's funds are managed by the Investment Manager in mutual funds.
- Benchmarks/Benchmarks: In the active control of mutual funds, one of the goals of the Investment Manager is to conquer parameters.
6. View Track Record of Preferred Mutual Funds
Another guide that is also very important is by watching the track record of the mutual funds that we specify. Keep an eye on and monitor the mutual funds that we specify. If it gives a good trend, and we already trust the choice, then we must immediately make an option. Don't even regret it, because the mutual fund movement is really active, we will definitely feel all the opportunities, including profit and loss.
7. Understand the Contents of the Prospectus
One of the laws that we must read and know before starting a mutual fund investment is the prospectus document. Know everything related to mutual funds, the instrument to be purchased, what important information can be obtained through the prospectus. The prospectus is there when you are going to make an investment.
Some of today's media and online bases that we can download and provide a prospectus to read. One thing again, make sure the Prospectus information is up-to-date by using the most recent because it is likely that every year there are always improvements and changes to the prospectus.