Tips for Choosing a Mutual Fund for Beginners
Mutual fund investment is now increasingly in demand by the community because it really becomes an alternative development of lucrative funds after deposits. People realize that mutual funds are more profitable than deposits.
People feel that mutual fund investment offers advantages, in fact, returns are higher than deposits.
Along with the progress and development of technology, mutual fund products are increasingly diverse and easily enjoyed online. On the one hand, this provides a diverse alternative choice, on the other hand it can bring confusion in determining and choosing the best mutual fund.
Now, because it’s easy to choose mutual funds, people (especially beginner investors) are highly encouraged to choose mutual funds intelligently. The term, as a beginner investor, of course do not ever “buy a cat in a sack”. Therefore, here are 8 tips that should be noticed by novice investors before choosing a mutual fund investment product:
1. Look at the profile of Investment Managers (MI).
In a fund fact sheet, you can see the track record of an investment manager who is responsible for assets. Therefore, examine the fund fact sheet to see the experience of the Investment Manager in managing assets owned, the number of customers, and the amount of funds that have been managed.
2. Investment strategy.
In the fund fact sheet, it can be observed the strategies used by Investment Managers in managing money. Fund fact sheets usually show the composition of shares or sectors invested.
3. Risk and returns.
All investments contain risks, as well as investment in equity funds that contain the risk of price fluctuations following the movement of stocks. In mutual fund investments, the higher the potential returns, the higher the risk that must be prepared to be borne. Well, for the least risk of mutual funds is money market mutual funds. With returns on deposit interest, money market mutual funds are relatively stable and safest compared to other mutual funds.
4. The costs that must be borne.
Investment costs in mutual funds should be considered, especially the costs charged to investors. The costs included include: purchase costs (subscription fee), sales costs (redemption fee), and transfer fees (switching fees). Therefore, try to buy mutual funds in MI or securities that do not charge or free.
5. Investor rights.
Next, consider the rights of the mutual fund unit holders. Do not be harmed, for example, do not get proof of participation or confirmation letter, do not get a share of investment returns according to the policy of dividing investment returns or cannot sell part or all of the participation units.
6. Investment policy.
The fund fact sheet also shows the outline of the mutual fund’s investment strategy. Therefore, pay attention to the allocation of funds in mutual funds and how much funds are used for equity investments, money markets, and other instruments.
7. Total managed funds.
The larger the managed fund, the more bona fide the mutual fund.
8. The performance of mutual funds.
Simply put, beginner investors are advised not to choose and buy mutual funds that grow slower than the JCI.
Easy is not the way to choose a mutual fund product?