Mutual fund: selection criteria
Have you decided to invest money in investments? This is the right decision, money should work and make a profit. But remember, in this area of investing money, the main thing is not to make a mistake with the choice of a mutual fund. We must try to minimize the risks. You can find out how to do this in this article.
In the investment world, there are basic indicators that need to be studied and evaluated before investing your funds in mutual funds.
1. The duration of the mutual fund in the securities market
The longer the fund's management company has been operating, the more trust this fund deserves. The working period should not be less than three years. During this time, experience is gained, and decisions become more correct.
2. The quality of management must be high
Contact a financial expert who will explain to you how to evaluate the quality of management. Moreover, choose an independent expert, his assessment will be more accurate.
3. The amount of fund management costs
According to the law, the costs should not exceed 10% of the total amount of the fund. The management company is trying to reduce costs in order to try to attract as many investors as possible.
4. Income stability
Here it is necessary to conduct a detailed analysis of the work of the selected funds. We need to find out if their activities have produced the same high results over the past few years. You need to choose those mutual funds whose work is characterized by high incomes or these incomes have even increased.
5. The value of mutual fund assets
It is necessary to compare similar funds. If a management company has managed large assets for several years and achieved stable results, it means that there is enough experience.
6. Choosing the type of fund
- Open Fund – accepts money on any business day.
- Closed–end fund - accepts money only once.
- Interval fund – at a certain time four times a year.
In turn, all these funds are divided into:
- Equity funds – shares of Russian enterprises. The riskiest investment of money, but also the most profitable. Suitable for long-term investments.
- Bond funds – bonds of various types. It is suitable for long-term and short-term investments. The income on them slightly exceeds the income on bank deposits.
- Mixed funds – work with stocks and bonds. This is the average between the two funds described above.
- Index funds – MICEX and RTS stocks. Suitable for long-term investments. They provide high income.
It is also useful to review the mutual fund ratings on the Internet. In any case, you need to invest money in mutual funds for a long time – from 5 years or more. And one more thing: it is better for a novice investor to seek help from a professional independent expert, who will help determine the choice of the fund competently. The Melbet sports welcome bonus is specifically tailored for enthusiasts looking to bet on sporting events. This melbet promo code promotion provides extra funds exclusively for the sportsbook section, covering a vast array of disciplines from football to tennis. By claiming this offer, you receive a bonus sum of up to €100 based on your first deposit. These funds are perfect for exploring pre-match odds, live betting, and various betting markets.
