Investing is an activity to invest capital into various types of assets with the aim to grow the value of the capital for the benefit of the investors within a certain period of time. Compared to regular savings, investing offers a potentially much greater return. Investment can be the right option to develop wealth, optimize assets, and achieve short and long-term aspirations.
There are various kinds of investment products, such as stocks, gold, deposits, bonds, properties, and mutual funds. Basically, all types of investment have the same principle of "higher risk, higher return". The amount of return will be proportional to the risk that must be taken. Therefore, understanding the right type of investment product is the first step for investors.
Every investor wants to invest with big profits but minimal risk. But, is there such type of investment? Read through the explanation below.
Mutual funds and mutual fund investment benefits
Mutual funds are a type of investment in which funds from investors will be collected and managed by investment managers and then invested in stocks, bonds, and money market instruments.
Sorted from the most conservative to the most aggressive, there are four types of mutual funds, namely money market mutual funds, fixed income mutual funds, mixed mutual funds, and equity mutual funds. Each offer different values of potential return.
In money market mutual funds, the collected funds from investors will be allocated to money market instruments which can be in the form of securities such as Bank Indonesia Certificates (SBI), bonds, deposits, government bonds (SUN), or corporate debt securities that have maturity periods. less than one year. This mutual fund offers a potential return of 4-7% in one year.
Next, fixed income mutual funds. This type of mutual fund potentially generates more than 7% a year, higher than money market mutual funds. However, keep in mind that the risk of this type of mutual fund is also higher. 80% of the funds from investors will be allocated to fixed income instruments such as debt securities, bonds and sukuk with maturities of more than one year. Thus, fixed income mutual funds are recommended for investment for a period of one to three years. In addition, this type of mutual fund is also suitable as an investment diversification option.
The next type of mutual fund is a mixed mutual fund. In mixed mutual funds, investors' funds will be invested in several combinations of investment portfolios consisting of various money market instruments, bonds, and stocks. Mixed mutual funds are known to be quite aggressive, with potential returns of 11% to 16% per year. If you don't have the risk profile for the dynamic stock mutual funds, mixed mutual funds can be used as an alternative. The common term of this mutual fund is 3 to 5 years.
The latter is the most aggressive type of mutual fund investment. Equity mutual funds invest at least 80% of the collected funds in shares and offer a potential return of 17-20% or more per year. However, in accordance with investment principles, the risk of this type of mutual fund is the highest among the other three types. Because most of the portfolio is in stock securities, the nature and movement of this type of mutual fund fluctuates, similar to the nature and movement of stock investments.
Understanding the types of mutual funds can help potential investors determine the right type of mutual fund investment. In addition, investors must understand their investment objectives and personal financial capabilities. For example, when investing in mutual funds with the aim of saving for education fund, conservative mutual funds such as money market mutual funds and fixed income mutual funds are considered appropriate. For needs that are fixed, investors would want to invest with low risk.
For beginners, money market mutual funds are highly recommended. It would be better for beginners to start from a type of mutual fund that is less aggressive. Later, when investors consider their portfolios growing, they can do a review and switch to other types of mutual fund investments that are more suitable.
Mutual fund investment with DBS Treasures
DBS Treasures is a priority banking owned by Bank DBS Indonesia for customers with a minimum fund placement of IDR 500,000,000. DBS Treasures offers a comprehensive suite of solutions to monitor, grow and protect your wealth.
Equipped with Intuitive Wealth Management to Empower Confident Decision, DBS Treasures is committed to supporting customers in making sure they make the right investment decisions at the right time. The main focus of investing in mutual funds with DBS Treasures includes professional investment management, insight to guide your investments, and reducing risk through diversification.
Investment management by professionals
To optimize product performance, all mutual fund investment options on the DBS Treasures are partnered with professional and reputable Investment Managers.
Insight to guide your investment
DBS Treasures, equipped with a team of data-based financial experts consisting of market intelligence, data scientists, product specialists, and certified relationship managers. The team will analyze the customer's risk profile and current market conditions to create a personalized investment strategy, which will then be communicated to customers through daily updates, monthly market updates, and eTalk series webinars.
Reduce risk by diversification
To reduce risk, customers can diversify the distribution of funds to various investment assets in onshore and offshore market through DBS Treasures.
In addition, DBS Treasures has continuous digital innovation for smooth investment transactions, including 24/7 mutual fund investment through the digibank by DBS Application, where customers can find mutual fund options, performance analysis, and buy, sell, or switch between products. In addition, for new investors, the SID (Single Investor Identity) registration process to KSEI (Indonesian Central Securities Depository) can also be done seamlessly through the digibank by DBS Application.
Mutual fund investment is an investment that can be used as an option to diversify ownership into various instruments as an effort to reduce investment risk. Mutual fund investments can be resold easily. Most importantly, mutual fund investments are safe because they are registered, regulated, and supervised by the government through the Financial Services Authority (OJK).
By becoming a priority banking client of DBS Treasures, enjoy the benefits of investing in mutual funds. Not only that, gain the right and accurate investment management strategy tailored to your needs by placing a minimum of IDR 500 million in various forms of investment instruments.
