Out of all investment instruments, Mutual Fund investment is still one of the popular ones among investors. This is because Mutual Fund has an easy, practical, and simple process. One of the most popular is the Equity Mutual Fund.
Many novice investors choose this investment instrument because of the various advantages. However, there are still many people who invest just because they follow the trend, without adjusting to their needs and abilities.
Then how do you choose the right type of investment, so that it can lead to profit in the future? One of them is through the Mutual Fund prospectus. For more details, see the explanation below.
What is a Mutual Fund Prospectus?
The Mutual Fund prospectus is a comprehensive information regarding a Mutual Fund product. From this information, investors can understand at least the outline of the investment product.
It contains various information which will be very useful for potential investors, such as the name of the Investment Manager, mechanism, rights and obligations, to the track record of the investment transaction and much more.
If investors already run through the information, then it can be used as a base for consideration whether investors will choose the Equity Mutual Fund or not.
Unfortunately, there are still many novice investors who feel that it is not necessary to understand the contents of the Mutual Fund prospectus. In fact, with a Mutual Fund prospectus, investors can optimize the profit from the investment.
Information in Mutual Fund Prospectus
As previously explained, the Mutual Fund prospectus displays various important information regarding an investment product. The following is some important information contained in the Mutual Fund prospectus.
- Investment Manager
In this section, you as a potential investor can find out about the Investment Manager's track record of experience and achievements. Not only that, you can also look for the track record of parties affiliated with the Investment Manager.
- Purpose, Policy, and Investment Restrictions
In this section you will find information about the goals, policies used, and strategies for managing these types of investment products. So that you can gain quite a lot of insight about the Mutual Fund product.
- Investment Benefits and Risk Factors
As another consideration, you will find information about the benefits of this investment, such as proper capital management, investment diversification, transparency, and growth in the value of these assets.
Not only the benefits, you also need to know about the various risks of your chosen investment. You need to understand that every investment has its own risks.
There are several risks that can occur, such as the risk of decreasing net asset value (NA) or prices, changes in interest rates, liquidity risk, to the risk of economic and political conditions.
- Allocation and Fees for Services
Here you will find information regarding detailed investment costs that must be incurred by potential investors. Not only that, you can also find out the Investment Manager fees and unit owner fees in this section.
- Property Rights
This section will explain the NAV, the conditions for selling part or all of the participation units, and the terms for profit sharing from the investment. You can also find Transaction Confirmation Letters (SKT) and monthly account statements to report on investment progress issued by the Custodian Bank.
- Dissolution and Liquidation
This part will lay out various actions or causes and procedures for dissolving Mutual Fund products if necessary to be carried out by the Investment Manager.
- Terms, How to Purchase, Transfer and Repurchase
This is the last section that you will find in the Mutual Fund prospectus. This section will explain the provisions regarding the purchase, sale, and transfer of investment units. It will also explain the minimum amount for investment transactions.
What are the Tips for Understanding Mutual Fund Prospectus?
In order to better understand how to invest right, there are a number of tips you can use to make it easier to understand the Mutual Fund prospectus, including:
- Observing the Status at OJK
The first thing you need to do is pay attention to the legality status of Mutual Fund products which can be seen on the official OJK platform. This is done to avoid the risk of fraud under the guise of investment.
You can also see the legality status through the regulatory permission from the investment fund manager itself.
- Finding the Track Record of Investment Managers
So that your investment is right on target and gain the intended profit from the Equity Mutual Fund, you need to first check the track record of the Investment Manager who will manage the investment.
You can find out information about an Investment Manager's track record by looking through Investment Manager's official website, news sites, and others. So you can see the performance of the Investment Manager so far.
- Checking the Track Record of Custodian Banks
Playing an important role in the investment process involving the Investment Manager, the custodian bank is tasked with keeping various securities as well as other assets such as interest, dividends, and so on. Not only that, the institution also plays a role in preventing the misuse of Mutual Funds by irresponsible Investment Managers.
- Knowing the NAV Calculation Method
As a potential investor, you also need to know how the NAV calculation method is used by the Investment Manager. From the calculation of the NAV, it will show the market value which can describe the progress of the investment that will be made after deducting various costs.
- Mutual Fund Financial Statements
Know whether the performance of the Mutual Fund product that you will choose is positive or not. Information such as profit/loss reports, statements of financial position/balance sheets, cash flows, and changes in capital can also be seen in the prospectus.
Start Investing in Equity Mutual Funds with DBS Treasures
You can access safe and convenient investment with DBS Treasures priority banking. Investments are easier to do and much more beneficial. Here are some of the benefits that you can enjoy if you become a priority banking customer here:
- Professional Investment Manager
You will be connected to professional Investment Managers when you invest with DBS Treasures. These Investment Managers will optimize investment funds through certain instruments.
- Investment Insights
You will be supported by a team of financial experts who can provide insights for investing. The professional team proactively provides updated market data analysis that suits your profile.
- More Practical Diversification
You will find it easy to diversify. There is a wide selection of assets to choose from so that funds can be spread around and provide greater profit potential.
- Easy Transactions with a Single Application
Another advantage of Equity Mutual Funds through DBS Treasures is the digibank by DBS Application which is easy and practical to use. Through this application, you can buy, sell, switch Mutual Fund assets and even do the SID (Single Investor Identification) registration process.
You will also gain access to various product choices through the Investment Managers or according to the selected Mutual Fund category.
Investing in Equity Mutual Funds through DBS Treasures will provide many benefits and conveniences, so you can confidently to make a move with solutions curated for you. Just click here to find the comprehensive information about these investment instruments.
