What is a unit fund and what are its functions? Mutual funds and their management

Among the most affordable and stable financial instruments that are present on the Russian market are mutual investment funds. They allow any willing citizen to receive income from investing in certain assets. What is the specificity of the activities of these financial institutions? On what income can you expect, working with mutual funds?

What is a unit investment fund?

What is a mutual fund, or unit investment fund ? This is a special form of investment of funds in the order of collective participation of depositors. It is assumed that the transfer of funds to the trust management of a special organization and the subsequent receipt of profits if the work of partners is successful.

Investing in mutual funds is carried out through the purchase of certain shares - "shares." In this case, depositors remain their owners, the management company only carries out the necessary financial transactions.

What do Mutual Funds give?

The main goal with which investors go to mutual funds is to make profit. Mutual funds allow you to earn even those investors who do not have a significant experience in the field of investment - all the amount of the relevant work is assumed by the management company. Specialists of this organization, relying on their skills and competences, find the best options for investing the money that they manage. The management company works for a percentage of the financial transactions carried out using the capital of the depositors.

Legal status of mutual funds

What is the legal status of mutual funds? It can be noted that they are not legal entities. At the same time, such should be the managing companies of unit investment funds. Mainly, a similar difference in legal status is due to the fact that both subjects of legal relations - mutual fund and the Criminal Code - do not overpay taxes. The transfer to the treasury under the considered scheme of their interaction is subject only to the proceeds received by investors in the sale of shares, as well as the statutory fees from the proceeds of the Criminal Code as a business entity.

How funds work

The unit fund operates on the basis of internal rules. They fix the conditions under which depositors transfer funds to the management company. The corresponding organization should have a license confirming its right to manage the property that belongs to mutual funds. This document is issued by the Federal Commission for the Securities Market. One management company can create several mutual funds.

As soon as the corresponding structure receives a license from the state, it must conclude several contracts - with the depositary, registrar, independent appraiser, and also the auditor. The rules, which we mentioned above, should be entered in the registers of the FCSM. Also registration in the relevant state structure is subject to a special document - A share issue prospectus. Once the management company has settled all the formalities, it can start financial activities.

The first stage of the MC activity is the primary allocation of units. In the course of this line of work, the CM must collect the minimum amount of capital. If this could not be done, then the share fund should be liquidated, and the money - transferred to depositors.

Control over the work of funds

The activity of mutual funds is subject to state control. The main body that implements it is the FCSM. So, the legislator during the development of measures to regulate the activities of mutual funds, certain rules have been formed, to which the relevant investment structures must comply.

For example, assets owned by mutual funds should be managed by one company, and stored in another. At the legislative level, norms are established that require detailed disclosure of information on investments. Mutual Fund reports also assume a high degree of detail in the information.

Is income guaranteed?

The specifics of the activity of mutual funds do not guarantee income for depositors. A company that manages a unit investment fund must redeem shares as soon as the investor so requests, but there are no statutory requirements regarding profitability for the structures in question. That is, despite the fact that Mutual Funds are positioned as financial instruments for investors who do not have much professional investment experience, it is assumed that the owners of capital are aware of all the attendant market risks.

The essence of the units

Let us consider in more detail what investment units are. When the depositor transfers funds to the UIF, he, in fact, acquires a stake in the organization. Thus, the investment share of a unit investment fund is a personalized security, which indicates that its owner is one of the owners of the mutual fund property. This citizen has the right to expect that the Criminal Code will properly manage the investment fund. He also has the right to compensation in the event that the trust management contract is terminated.

A share does not have a minimum value. Its monetary value is expressed in the price of the fund's net assets. That is, the value of one taken unit is a multiple of the total sum of the mutual fund funds divided by the number of units. The price of the corresponding shares varies depending on the results of the investment. A share can not be considered an issue type of securities, like shares. At the same time, the relevant type of financial instruments can not be derived from the units. The total number of shares in the mutual fund's capital is not limited by legislation.

Types of funds

Consider what kind of mutual funds there are. There are several criteria for their classification. According to one of the most common, mutual funds can be divided into 3 types: open, closed, as well as interval. What is their specificity?

An open-ended mutual fund is a financial institution that is considered the most common in the relevant category. Their main feature is the free purchase and sale of shares. The amount of capital, as well as the number of depositors are not limited. For the type of Mutual Funds under consideration, investing in assets that are highly liquid is characteristic.

Closed mutual funds are characterized by the fact that they sell the formed units when the foundation is established. These structures do not redeem shares, not counting precedents, when the depositor makes claims to the rules of the Criminal Code. The corresponding funds are formed, as a rule, for a fixed period, which is agreed with investors in advance. A closed unit investment fund is a structure that often has a sectoral specialization. For example, its activities may be related to the real estate market or innovations. However, for example, the "First Mutual Fund of Startups" is open. Although his industry specialization - just the same innovation.

There are interval mutual funds. The peculiarity of their activities is that the sale of shares, as well as their repayment is carried out at fixed intervals. In this case, interval funds mainly work with shares. Therefore, in potential such mutual funds (reviews of many investors confirm this) can be more profitable than, for example, open mutual funds.

There is another common criterion for the classification of mutual funds - the sphere of investment. Thus, the "First Mutual Fund of Startups", as we noted above, carries out activities in the field of innovations. But there are also mutual funds, which are active in the bond market, mortgages, real goods, in the sphere of industry.

For example, funds operating in the bond segment invest money, mainly in the relevant securities issued by the state, corporations, working with bank deposits and currency. Their assets, usually, are not formed at the expense of shares. Mutual funds classified as belonging to this category are considered by many analysts as not the most profitable, but very reliable, which is due to the nature of bonds that require obligatory payment of dividends to investors by their issuers.

In turn, Mutual Funds, characterized by a risky investment strategy, are those that work with shares. But at the same time, the profitability in them can be incommensurably higher than in funds investing funds in bonds. It can be noted that within this category of mutual funds there are additional grounds for classifying institutions. So, there are funds specializing in investing in shares of large firms - blue chips, but there are those who prefer to invest in the assets of companies-beginners.

There are mixed mutual funds. They are difficult to describe as leading activities in a specific segment. But at the same time, many of them combine the best qualities of funds specializing in shares, namely the high yield and at the same time the characteristics of investment funds investing in bonds, in particular stability. Investing in such institutions is recommended for investors for whom the corresponding financial market is completely new.

Mutual Fund Functions

It will be useful to consider what functions are typical for mutual funds. They can be classified into social and economic. The functions of the first type are:

• Giving citizens the opportunity to earn in addition to the usual sources of income - wages, deposits, even if they do not have specialized knowledge in the field of investment;
• Assistance to the financial education of the population (the investor in time will begin to understand the market laws affecting the success of investments);
• The creation of jobs for financiers, as well as specialists with related profiles, lawyers, programmers, secretaries, sales managers.

Among the basic economic functions of mutual funds:

• Increasing the capitalization of various business sectors, the financial market, which ultimately contributes to the growth of the country's economy;
• The promotion of entrepreneurial initiatives - both direct (encouraging financiers with experience to open their businesses in the form of management companies), and indirect (the formation of depositors to earn money by improving knowledge and skills in investing);
• Provision of additional tax revenues to budgets of various levels - at the expense of deductions from depositors' incomes, as well as fees from authorized capital.

Consider now the advantages and disadvantages of investing in mutual funds.

Advantages and disadvantages of investments in funds

Let's start with the advantages of the work of depositors with mutual funds. The most important advantage that any mutual fund possesses is that the capital is managed by experienced experts. If this criterion is not met, then the management company simply will not receive a license from the FCSM. This agency puts forward certain requirements for the professional qualifications of the owners of the Criminal Code, in due course attests them. Mutual funds are usually opened by investors with experience, confident in their abilities and skills.

Investments in the relevant type of funds are very affordable. The minimum amount of investments in most mutual funds is about 2-3 thousand rubles, sometimes even less. The expected return on them can be comparable with the profit from placing deposits in banks on terms set for very large deposits - from several hundred thousand rubles.

Investing in mutual funds in terms of security in the aspect of a number of criteria is comparable to the same bank deposits that are characterized by very high security of the state. Control over the activities of the funds is carried out by a separate department, and the components of the activity of mutual funds procedures presuppose very strict monitoring. Strict state supervision is supplemented by legislative requirements, for example, those that imply the obligation of the Criminal Code to place funds in a separate depository.

Among the significant advantages of Mutual Funds are soft taxation. Current transactions are not subject to charges. Payment of necessary taxes is required only if the share is sold by the investor. In turn, the terms of the CC on commissions are usually quite acceptable for depositors - it is taken, as a rule, 3-4% of the turnover of capital.

There are also disadvantages for Mutual Funds. First of all, a mutual fund can not guarantee revenues. At the same time, the company's success in the past does not directly predetermine a high probability of a repeat of the investment results. It often happens that a popular and popular mutual fund, and quite deservedly received a similar status, chooses not the most optimal investment strategy, as a result of which investors remain with nothing. This may also be due to new market conditions. In addition, even if the activities of the UK are unprofitable, the client nevertheless needs to pay with her for services through the deduction of the commission.

Among the notable shortcomings of mutual funds are the relatively low rate of withdrawal of funds by the depositor. Typically, the investor has to wait cashing cash about a week. At the same time, he may have expenses related to the need to design special investment certificates.

Experts on mutual funds

What are the experts' opinions on the activities of Russian mutual funds? Despite these shortcomings, analysts generally consider Mutual Funds as reliable, transparent and affordable investment tools. Specialists note that the activity of mutual funds is characterized by a very high degree of openness, conditioned not only by the requirements of legislation, but also by client-orientedness of these institutions.

The most important thing, according to experts, is that the management of the unit fund is carried out by professionals. There are financial instruments that assume that the yield will depend directly on the investor's actions. In the case of mutual funds, they can entrust their capital to experienced people.

Experts note that investors generally trust mutual funds. So, for example, at the end of the crisis of 2008-2009, when the expected outflow of capital of investors from mutual funds, many citizens at the first opportunity began to return to the interaction with the funds. The dynamics of investing in many mutual funds exceeded the figures recorded before the crisis.

How much can you earn on Mutual Funds?

What can be the expected return on investment in mutual funds? As we noted above, the funds are divided into several categories - some, due to the desire to invest in stocks of dynamically growing businesses, may be more profitable, others that prefer to invest in blue chips provide less profit. In the first case, the probability that the investor will remain with nothing, of course, is higher.

It is extremely important how well the management company approaches the investment issues. Mutual funds that are open to experienced market players tend to be more profitable and more stable than those that are based by newcomers - despite the fact that their qualifications have strict requirements at the level of the state regulator.

At open mutual funds, specializing, for example, on bonds, the average yield is about 10-12% per annum. Funds that invest in stocks can provide more profit - about 20%, sometimes - more. Closed mutual funds on the level of profitability occupy the middle position between them. The "share fund of start-ups", judging by some public data, recorded a profit of several tens of percent per annum. But it depends on how much the main asset of this unit investment fund is - the capitals of innovation companies. Some of Sberbank's mutual funds, judging by public data, have a return of more than 30% per annum.

Specialists in the field of financial markets recommend working with several mutual funds at the same time, thereby diversifying investments. In potential this can also increase profits. It makes sense, analysts believe, to compare Mutual Funds by the amount of commissions and other expenses that are not directly related to obtaining investment proceeds. You can also pay attention to the characteristics of the Criminal Code from the point of view of the founders. If the management company is opened by a major player in the market, as in the case of SIF PIFs, its reliability is higher than that of firms that recently appeared in the relevant segment. Thus, for the depositor, an integrated approach to assessing the prospects for cooperation with a particular fund is optimal.

Prospects of mutual funds

How promising can be considered such a financial instrument as a unit investment fund? In general, experts estimate it as having a very large potential due to the fact that the Russian economy in many respects is classified as developing.

Many industries in the national economic system of the Russian Federation are not saturated. Moreover, in connection with the well-known events on the foreign policy arena, for many businesses new opportunities are opening, in particular in the sphere of import substitution. Even those industries that have traditionally been considered saturated (for example, the food industry, some segments of engineering and consumer goods), can receive additional incentives for growth. Therefore, financiers have much to invest and, accordingly, to management companies owning mutual funds, too.

It is known that the yield of similar structures in Europe as a whole is lower than in the Russian Federation. Therefore, experts estimate the prospects of the funds as positive also from the point of view of the investment attractiveness of the Russian market for foreign partners. On the other hand, foreigners are sufficiently attentive to the stability of national economic systems in general. The high profitability of certain financial instruments, such as Mutual Funds, may certainly be of interest to them. But an equally important factor for a foreign investor will be the stability of the economy as a whole, the strategic prospects for interaction with a particular market. Therefore, the attractiveness of Russian mutual funds will directly depend on how successfully the country's economic system will develop in all other segments.

Growing market

One way or another, in many respects, the market of mutual funds in the Russian Federation is growing, with prospects for further increase in capacity. The past crisis showed that investors generally trust the funds. As the economic situation improves at the present stage of development of the national economy of the Russian Federation, it is not excluded that citizens will acquire new incentives for investing in assets with the assistance of management companies of mutual funds. Most importantly, mutual funds have ceased to be perceived in the Russian Federation as an exotic financial instrument. Citizens in general are open to mutually beneficial cooperation with these financial structures.