Definition and Types of Mutual Funds

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Mutual funds is a collection of public funds, the investor or the investor to then be managed by the Investment Manager and the portfolio is invested in various types of investments in securities or other financial products.

According to the dictionary of finance, the Fund identified as the portfolio of financial assets terdivesifikasi, listed as an open investment company, which sold shares to the public offering price of the premises and its withdrawal on the price value of net assets.

Types of mutual funds based on investment properties:

• Growth Fund: This mutual fund has an investment portfolio that aims to get high profit growth. Types of investment properties have a high volatility, such as investing in the stock instrument.

• Stable Fund: Mutual fund gives priority to the type of investment portfolio that aims to get a steady profit growth. Type of investment has a somewhat less volatility properties, such as investment in the bond instrument.

• Safty Fund: Mutual funds are more concerned about security on investment funds and do not like the price volatility or instability of income from the investment instrument. Investment fund manager types "safty fund" is likely to perform

investments in money market instruments, such as deposits.

Mutual funds by type can be divided into 4 sections, namely:

A. Mutual Fund Shares

• Mutual fund shares are a form of portfolio investment in shares of instruments (equity) with the amount of at least 80% (eighty percent) of total investment assets.

• The investment manager who made a purchase on the stock instruments are almost always done on the stock selection "blue chip" (seed stock) and the type of liquid stocks.

• The investment made in shares, the risk is high but produce high levels of mengembalian anyway.

2. Money Market Mutual Funds

• Mutual fund investments are making a choice on what type of money market investment instruments with a maturity of less than 1 (one) year.

• The attractiveness of investment in money market instruments are highly liquid because of its nature.

• Money Market Mutual Fund has a lower risk level than any other investment instruments.

3. Fixed Income Mutual Funds

• Mutual Fund has a kind of portfolio investment in the form of debt securities, like bonds with a minimum amount of the composition as much as 80% (eighty percent) of total assets.

• fixed-income instruments, like bonds, providing the interest rate (coupon) is relatively attractive compared to investment in deposits.

4. Mixed mutual funds

• This type of mutual fund allocates its investments in various portfolio investment (investment mix of instruments).

• The instrument can take the form of shares and investment combined with fixed income instruments (bonds).