Mutual funds are the container and the pattern of fund management / capital for the group of investors to invest in investment instruments available in the market by buying mutual funds. These funds are then managed by the Investment Manager (MI) into the investment portfolio, whether it be stocks, bonds, money market or securities / other security. According to Capital Market Law No. 8 of 1995 article 1, paragraph (27): "Mutual funds are a vehicle used to collect funds from public investors to be invested in portfolio securities by the Investment Manager.
From the second definition above, there are three important elements in the sense of mutual funds namely:
The existence of a collection of public funds, both individuals and institutions,
Joint investment in a diversified portfolio of securities that have been, and
The Investment Manager is believed to be the fund manager owned by the investor community.
In mutual funds, investment management to manage the funds placed in securities and realized a gain or loss and to receive dividends or interest which the posting into the "Net Asset Value" (NAV) of mutual fund.
Wealth mutual funds managed by investment managers are required to be stored at the custodian bank that is not affiliated with the investment manager, custodian bank where this will act as a collective day care centers and administrators.
Mutual funds who first called the Massachusetts Investors Trust, published on March 21, 1924, which in just over a year has had as many as 200 investors of mutual funds with total assets worth U.S. $ 392,000.
In 1929 when the stock market falls then the growth of the mutual fund industry has become slow. Responding to the collapse of the stock then the U.S. Congress issued a Securities Act 1933 (the Securities Act of 1933) and Stock Exchange Act 1934 (the Securities Exchange Act of 1934).
Under these regulations, the funds must be registered with the Securities and Exchange Commission or SEC is usually called a commission in the United States who handle securities trading and capital markets. Besides that, the publishers are obliged to provide mutual fund prospectuses that contain information to mutual fund disclosure, also includes securities that become the objects under management, information on investment managers published a mutual fund.
The SEC is also involved in the design of the Investment Company Act of 1940 is the reference to the provisions that must be met for any registration of mutual funds today.
With the restoration of market confidence in the stock market, mutual funds began to grow and develop. Until late 1960 there are estimated to have about 270 mutual funds with funds under management by 48 trillion U.S. Dollars.
Index mutual funds were first introduced in 1976 by John Bogle with the name First Index Investment Trust, which is now called the Vanguard 500 Index Fund, which is the largest mutual fund with funds under management which reached 100 billion U.S. Dollar
One of the largest contributors of mutual fund growth in the United States is by the provisions on individual retirement accounts (individual retirement account - IRA), which adds the provisions into the Internal Revenue Code (tax laws in the United States) that allow individuals (including those who already have a company pension plan ) to set aside U.S. $ 4,000 a year.
Based on the Capital Market Law No. 8 of 1995 article 18, paragraph (1), the legal form of mutual funds in Indonesia there are two, namely the Mutual Fund Limited Liability Company (PT Mutual Funds) and Mutual Fund Collective Investment Contract (KIK). Mutual Fund in the form of the Company (PT. Mutual Funds)
a company (limited company), which from the legal form is no different from other companies. The difference lies in the type of business, namely the type of investment portfolio management business.
Collective Investment Contract
contract is created between the Investment Manager and Custodian Bank are also binding on Unit holders as the Investor. Through this contract the Investment Manager is authorized to manage the portfolio of securities and custodian banks authorized to conduct custody and investment administration.
Based on the characteristics of the mutual funds can be classified as follows:
Open Mutual Fund
are mutual funds that can be sold back to the Investment Management Company who published it without going through the trading mechanism at the stock exchange. Selling price is usually equal to their net asset value. Most of the mutual funds that exist today is an open fund.
Mutual Funds Closed
are mutual funds that can not be resold to investment management companies that publish it. Closed mutual funds can only be resold to other investors through the mechanism of trading on the Stock Exchange. Selling price can be above or below their net asset value.
Fixed Income Mutual Fund.
Mutual funds that invest at least 80% of managed funds (assets) in the form of debt securities.
Stock Mutual Funds.
Mutual funds that invest at least 80% of funds under its management in equity securities.
Mutual mixture.
Mutual funds that have a ratio of the target asset allocation in stocks and fixed income securities that can not be categorized into three other mutual funds.
Money Market Mutual Fund.
Mutual funds that invest in debt securities planted with maturities of less than one year.
Mutual Funds have several benefits that make it one attractive investment alternatives, among others:
Managed by a professional management
The management of a mutual fund portfolio held by the Investment Manager who is specialized expertise in fund management. The Role of Investment Managers are very important because individual investors typically have limited time, so it can not conduct research directly in analyzing the effects of price and access information to capital markets.
Investment Diversification
Diversification, or spreading investments embodied in the portfolio will reduce risk (but not eliminate), because the funds or the Fund's assets invested in various types of securities so that the risks were too scattered. In other words, the risk is not at risk when a buy one or two types of shares or securities individually.
Transparency of information
Mutual Funds are required to provide information on the development of its portfolio and the cost will continuously so that holders of Units to monitor the benefits, costs, and risks of each saat.Pengelola Mutual Fund shall announce the Net Asset Value (NAV) it every day in newspapers and published a semi-annual financial statements prospectuses and annual and regular basis so that investors can monitor the progress of its investments on a regular basis.
High Liquidity
To be successful the investment made, every investment instrument must have a high enough level of liquidity. Thus, investors can liquidate again Participation Units at any time according to assessments made by each mutual fund that allows investors to manage its cash. Open mutual fund shall buy back the Participation Units that are highly liquid.
Low Cost
Because the mutual fund is a collection of funds from many investors and then managed in a professional, then in line with the ability to make these investments will generate also transaction cost efficiency.
Transaction costs will be lower than if individual investors do their own transactions in the stock.
Deciding to consider refinancing of mortgage for home loan is a major determination. Next key issue involved is to find ways to get profitable quotes for mortgage from banks. A thorough research of prevailing market rates is essential to obtain competitive quote from mortgage firms. Being familiar with current trends enables one stand a better chance of bargaining for lower interest charges. Mortgage rates usually increase or decrease in accordance with securities in Wall Street. A careful overview of market trends helps one save considerably on interests.
Comparing different loan schemes from a particular mortgage vendor and also form different vendors would facilitate one to choose the most profitable scheme. Among major tools available in market for evaluating dissimilar loans programs is the Annual Percentage Rate (APR). Laws of the state make it mandatory to expressively disclose APR while marketing their mortgage rates. This is for the benefit of borrower and to prevent them from falling prey to lower advertised rates, and find out if there are any hidden fees and upfront costs involved later.
Personal meeting with lenders, bank officials' and mortgage professionals' help in getting a competitive interest quote for your loan. Being well prepared with entire documentary evidence in support of your financial situation before meeting the people at bank enhances chances of receiving lower interests. Presenting documents to support your favorable credit history would tempt bank managers to provide you with lucrative mortgage quotes.
Papers essential to obtain fast and lucrative loans rates include:
Verification of employment status and proof of income sources.
Previous paid credit card bills and other similar statements to show history of genuine payments in past
Purchase contract of the house if it is available.
Bank details such as address of bank and your account numbers are important. Also previous 2-3 months statement of current and savings account are required.
Tax returns of last two years provide excellent proof of your financial position and hence should always be carried along while visiting the mortgage professional.
Entire information about other existing debt like car loans, student loans, retail credit cards or furniture loans, if any are required to acquire mortgage deal.
Presenting any gift vouchers received from relatives and friends would encourage bank managers to have increased faith in your paying capabilities. Such gift letters ensure that money acquired through gifts belongs to the recipient and the recipient does not have any liability on such financial assets.
Self-employed individuals may present their previous year's balance sheets and other tax statements.
Another good deal is about initially locking the specific rate of interest at time of proposal that would be charged. The process of loan approval might take some time and during such a time interval there might be fluctuation in rates of interest. Getting mortgage quote fixed at time of application relieves one from falling prey to chances of higher charges being imposed at time of loan approval.
Interest rates charged by bank also depend upon factors as amount of loan required, time period of loan, down payment, discount points, adjustable rates, closing stocks and so on.
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