Every investor wants to know where to invest with maximum profit. One of such tools is Mutual Investment Funds, for short, mutual funds.
Their profitability rating is constantly changing, and depends on many factors. We will try to understand in more detail what kind of financial instrument it is, what advantages and disadvantages it has. Read more about what mutual funds are, their profitability rating, as well as what you need to know before investing, later in the article.
What are mutual funds
A mutual fund is a kind of cash desk of total money, consisting of shares (units) of investors without involving legal entities and banking organizations.
Manages it, or rather tries to increase these funds, the management company with which they enter into an agreement. She receives a certain bonus for this, and investors - an increase in capital.
Good example
For a better understanding, we will simulate a situation: an apple tree is sold in a cooperative garden, which will bear fruit in a year.
One person does not have the opportunity to buy it, he offers friends to invest together in the purchase of an apple tree, in order to jointly generate income. As a result, they form a
mutual fund and trust it to one person. An apple tree is bought, which in a year begins to generate income. Friends share it depending on the share in the fund. But there is no guarantee that the tree will not dry tomorrow or bear fruit. Friends can invest money and lose everything.
Mutual Funds, the profitability rating of which can change every day, are arranged in the same way. The management company attracts money from customers and forms units from them. It does not mean anything if the name of the fund is associated with any bank, for example, Sberbank mutual funds - profitability, the rating is not guaranteed by PJSC Sberbank.
An investor can also lose his money, despite the fact that the management company is really connected with it, unlike a bank deposit, the profitability of which is guaranteed both by the bank and the insurance company, since all deposits of the population are insured against unforeseen situations
First mutual funds
The first such financial instruments appeared in the USA in 1924.
But during the period of economic crises, the American population did not trust management companies. To carry money to strangers in order to own it is not known what? - So ordinary citizens reasoned at that time period.
Unit Investment Fund Development
The mutual fund boom occurred in the early 1950s. At this time, the US population "matured" to understand such financial instruments.
Mutual Funds began to appear in domestic markets in the mid-1990s.
Today in Russia the most stable company, which shows a positive dynamics of growth of shareholders' income from year to year, is Sberbank. Trust Investment Company. ”
Types of mutual funds
Next, we list what UIFs are.
Their profitability rating, as well as risks, directly depends on the type of fund:
- Bonded. The method of investing in bonds is considered the least risky, but their yield is lower than other types. It is believed that such an instrument is needed to preserve capital without the threat of loss.
- Promotional. Shares of various companies are acquired with the money of shareholders, on the rate of which both profit and loss depend.
- Mixed. A kind of golden mean in investment strategy.
- Venture capital. Investors invest in the purchase of securities of companies that enter the market with various innovative products. More than half of them turn out to be unprofitable, but one successful transaction is enough, and all losses are compensated, and profit will increase.
- Mortgage. Investors' money is invested in residential or commercial real estate.
- Hedge The most risky, but at the same time, the most profitable funds. The trust company monitors market fluctuations, and adapts to them, thereby playing for a fall, or growth.
Mutual Fund of Sberbank: profitability. Consumer Sector
Now, more about one of the investment products from Sberbank - the mutual fund Consumer Sector. Its advantages:
- Minimal risks.
- Possibility of deposit from 15 thousand rubles.
- At the same time, you can invest in several mutual funds.
To date, the most successful mutual funds of Sberbank (profitability) are the Consumer Sector. Reviews among investors are, of course, contradictory.
But for 2016, the Consumer Sector is among the top ten among all mutual funds in terms of profitability. The sphere of consumer goods is least of all unprofitable in crisis years, which means that this instrument still has good growth prospects.
The risks
Despite the fact that this is a financial product from Sberbank, he will not give guarantees for saving money and, especially, for income. Mutual funds from the largest Russian bank today, although they are among the most stable, can also go broke any day. In this case, investors will not receive insurance payments, since such instruments do not fall under the Law on Compulsory Deposit Insurance.
We hope that it is now clear what Sberbank mutual funds are. Profitability on them can range from a negative balance to 30-50% per annum. This is much higher than deposits.
As a rule, they have limited mutual funds of Sberbank’s yield. This is understandable: Sberbank. Asset Management ”tries to invest only in proven assets with the goal of minimizing possible losses. For example, such a mutual fund as “Ilya Muromets” has a return on 3 years of only 14% per annum. Hence the negative feedback from novice investors, which you can understand: even on a regular bank deposit without risks, with a deposit insurance program (recall, mutual funds do not fall under it) for 3 years you can get more profit.
It is likely that in a few years the shareholder may even lose from the initial contribution.
Therefore, you need to think carefully about everything before deciding whether to invest in such a financial instrument.
Consumer Sector Analytics
Mutual Fund “Consumer Sector” occupies one of the leading positions in terms of profitability for 3 years at Sberbank - profit amounted to more than 130 percent. Compare, for example, with a bank deposit of 5-6%. Hence the conclusion - mutual funds can bring significant profits, compared with conventional bank deposits.
But why is this fund leading? It is all about the investment strategy: the mutual fund allocates funds to the shares of Russian companies that produce consumer goods for domestic use. Basically, these are three groups:
- Manufacturers of consumer products.
- Banking sphere.
- Telecommunications.
In the context of economic sanctions and counter-sanctions, as well as the crisis, this strategy is the most successful. But everything can change when the market begins to grow in other areas. Therefore, the investor needs not only to analyze the profitability for previous years, but also to delve into the economic situation in the country and the world.