5 Advantages of Investing with Mutual Funds

You want to invest but have mediocre capital? If so, you need to try investing with mutual funds.

Mutual funds have enough prestige because of the ease of processing, transparent nature, and return which is interesting. With so many types of mutual funds, you are also free to choose which one best suits your goals.

Mutual funds do have risks like other investments, but you also have to consider the advantages, such as the 5 advantages of mutual funds which will be discussed later. Come on, keep reading!

Very Affordable

You could say, mutual funds are the cheapest investment instruments because you don't need big capital to get started. Currently, you can start from IDR 10.000 – IDR 100.000. Very affordable right?

This cheap capital also allows you to invest in securities that are difficult to obtain with small capital. The mutual fund scheme is crowdfunding so that with small capital, you can buy expensive securities such as bonds or stocks.

Investment Diversification

Even with a small capital, you can already diversify your assets into various securities. This is a distinct advantage of mutual funds. For example, you have a capital of IDR 500.000 for a mutual fund. Then, you allocate it to five different assets with a capital of IDR 100.000.

The five selected assets are stocks in the banking sector and FMCG, Government Securities (SUN), time deposits, and mixed mutual funds. This diversification will provide better opportunities for money growth and reduce the risk of decline in value.

Professionally Handled

You don't have to worry about using mutual funds if you don't have good knowledge about investing. You only need to deposit capital, check report results, and sell mutual funds. In charge of observing market potential and providing portfolio reports is the investment manager.

He is a party who has obtained permission to handle investments, for example an Investment Manager Representative license and/or an international license certified financial analyst (CFA). In Indonesia alone, there are 97 investment managers who have received official permission from the Financial Services Authority (OJK).

Time Efficiency and Transparent

Since most of the investment process is handled by investment managers, you no longer need to spend time monitoring your portfolio. You also don't have to worry about being cheated by an investment manager because he or she is required to attach a portfolio report periodically in fund fact sheet (FFS).

In addition, the net asset value/unit of participation (NAV/UP) or equal to the price of the mutual fund is always informed openly through the media. NAV/UP also indicates performance or a mutual fund.

Ease of Processing and Disbursement

In addition to investment diversification, another advantage of mutual funds is the easy entry and exit process. Simply by having a bank account and a Taxpayer Identification Number (NPWP), you can start investing with mutual funds. Don't worry, this investment will not be taxed!

Then, the process of disbursing funds is also very easy. All you have to do is sell your UP and then wait for the funds to be sent to your account for a maximum of 7 trading days (Saturdays, Sundays, and holidays don't count). Very practical isn't it?

How to Calculate Mutual Fund Profits

Are you still unsure about investing with mutual funds? Try calculating the profit or return which you will get. With this, you can calculate mutual fund profits every month, even every year.

However, the benefits that can be obtained apart from being seen in the prospectus, will also depend on:

1. Mutual fund type. Each mutual fund has a level of risk and return diverse. The mutual fund profits you get will be greatly influenced by this factor.
2. Composition of securities in mutual funds. In one type of mutual fund there are various examples of securities. For example, in money market mutual funds, the available securities options are time deposits, Money Market Securities (SBPU), Bank Indonesia Certificates (SBI), etc.
3. Fees charged. Usually there are selling fees, purchase fees, investment manager fees, custodial bank fees, etc. Charges and percentages depend on the mutual fund product.

Those are the five advantages of investing with mutual funds and how to calculate the benefits. So how, are you interested in getting started? Faster cuan is not it?

Image source headers:Unsplash

Take the quiz and challenge #NgabubureaDS on Instagram @dailysocial.id during the month of Ramadan, which will distribute prizes every week in the form of takjil, hampers to subscriptions to DailySocial.id premium content for FREE. Check out more info HERE and keep an eye on our weekly quiz HERE.