{"id":333481,"date":"2024-10-20T00:13:00","date_gmt":"2024-10-19T21:13:00","guid":{"rendered":"https:\/\/finance.inform.click\/?p=333481"},"modified":"2026-02-12T18:57:09","modified_gmt":"2026-02-12T15:57:09","slug":"investing-in-mutual-funds-how-to-make-money-on-mutual-investment-funds","status":"publish","type":"post","link":"https:\/\/finance.inform.click\/en\/investing-in-mutual-funds-how-to-make-money-on-mutual-investment-funds\/","title":{"rendered":"\ud83d\udca1 Investing in mutual funds: how to make money on mutual investment funds"},"content":{"rendered":"

\n Many people think about how to make their money<\/a> work for them, rather than lying dead weight in the bank. One of the popular solutions for passive income<\/a> is investing in mutual investment funds (MIFs). But what is behind this financial instrument, and how can it help achieve financial goals? Let's figure it out. A mutual investment fund (MIF) is a financial structure that combines the funds of several investors for joint investment in assets<\/a>. The management company (MC) is responsible for the efficient distribution of capital in order to maximize profits<\/a>, which are then divided between all participants. But how does this work in practice?\n<\/p>\n

\n \ud83d\udcc9 A real-life example<\/a> for understanding mutual funds
\n<\/h3>\n

\n Imagine that three friends, John, Mike, and Emma, \u200b\u200bhave $100 each and want to invest. Their uncle Bob has no money, but has a great plan to make it grow. He offers to take their money, promising to return it with interest. The friends<\/a> agree, and Bob takes on the task of making money. To do this, he buys fruit at a wholesale market for $300, sells it at another market for $360, and in the evening returns $110 to each friend, keeping $30 for himself as a reward. In this story, the friends act as shareholders, trusting their funds to Bob, a management company<\/a> that invests money in various assets and earns on the difference in value. For its services,<\/a> the management company takes a commission, similar to how Bob kept part of the profit for himself.\n<\/p>\n

\n \ud83d\udca1 The main advantages<\/a> of investing in mutual funds
\n<\/h3>\n

\n Why are mutual funds so popular among beginner and experienced investors? Here are some key advantages:\n<\/p>\n

    \n
  1. \n Diversification<\/a><\/strong>. Mutual funds offer access to various assets<\/a>: stocks, bonds, real estate. This reduces risks<\/a>, because assets<\/a> are distributed between different sectors of the economy.\n <\/li>\n
  2. \n Availability<\/a><\/strong>. You can start investing in mutual funds even with a small amount. There are funds with a minimum entry threshold of $100, which makes them accessible to most.\n <\/li>\n
  3. \n Liquidity<\/a><\/strong>: Most mutual funds are open to buying<\/a> and selling<\/a> shares at any time, allowing you to quickly manage your investments.\n <\/li>\n
  4. \n Transparency<\/a> and security<\/a><\/strong>. The activities of mutual funds are strictly regulated by financial authorities, which eliminates the possibility of fraud.\n <\/li>\n<\/ol>\n

    \"Investing<\/a><\/p>\n

    \n \ud83d\udcca Types of mutual funds
    \n<\/h3>\n
      \n
    1. \n Open-ended mutual funds<\/strong>. You can buy or sell shares at any time. This type of mutual fund provides flexibility<\/a> in investment management.\n <\/li>\n
    2. \n Closed mutual funds<\/strong>. Mutual funds that operate for a specific period, such as a year or two. The share can only be sold at the end of this period.\n <\/li>\n
    3. \n Interval mutual funds<\/strong>. Mutual funds that allow you to buy and sell shares only during certain time intervals.\n <\/li>\n<\/ol>\n

      \n \ud83d\udd0e How to invest in a mutual fund?
      \n<\/h3>\n

      \n To start investing in a mutual fund, it is enough to open an account through a management company or bank. You will only need a passport and bank account details<\/a> for withdrawing funds<\/a>. Changes<\/a> in the value of shares can be tracked online<\/a> through the official websites of management companies.\n<\/p>\n

      \n \ud83d\udd25 Mutual fund yield<\/a> and risks<\/a>
      \n<\/h3>\n

      \n The average annual return on mutual funds is about 20-25%, which is higher than the return on bank deposits. However, it is important to understand that the return on mutual funds is not guaranteed – both capital growth<\/a> and losses are possible, depending on market conditions.\n<\/p>\n\n\n\n\n\n\n\n\n\n
      \n Mutual Fund\n <\/th>\n\n Type\n <\/th>\n\n Return on investment<\/a> for the year (%)\n <\/th>\n\n Rating\n <\/th>\n<\/tr>\n<\/thead>\n
      \n “April Capital – Second Tier Shares “<\/a>\n <\/td>\n\n Stock<\/a>\n <\/td>\n\n 44.23%\n <\/td>\n\n \u2b50\u2b50\u2b50\u2b50\u2b50\n <\/td>\n<\/tr>\n
      \n “April Capital – Commodity Companies<\/a> ”\n <\/td>\n\n Stock\n <\/td>\n\n 30.24%\n <\/td>\n\n \u2b50\u2b50\u2b50\u2b50\n <\/td>\n<\/tr>\n
      \n “Raiffeisen – Electric Power”\n <\/td>\n\n Stock\n <\/td>\n\n 23.36%\n <\/td>\n\n \u2b50\u2b50\u2b50\u2b50\n <\/td>\n<\/tr>\n
      \n “URALSIB Energy Perspective”\n <\/td>\n\n Stock\n <\/td>\n\n 23.31%\n <\/td>\n\n \u2b50\u2b50\u2b50\u2b50\n <\/td>\n<\/tr>\n
      \n “Sberbank – Electric Power Industry”\n <\/td>\n\n Stock\n <\/td>\n\n 21.00%\n <\/td>\n\n \u2b50\u2b50\u2b50\n <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

      \n \ud83d\udcbc Examples of<\/a> the best mutual funds
      \n<\/h3>\n

      \"\ud83d\udca1<\/a><\/p>\n

      \n Here are a few funds that have performed well at the end of 2023, which will<\/a> help you understand which options are most promising:\n<\/p>\n\n\n\n\n\n\n\n\n\n
      \n Mutual Fund\n <\/th>\n\n Change in value\n <\/th>\n\n Growth over the period (%)\n <\/th>\n<\/tr>\n<\/thead>\n
      \n April Capital – Second Tier Stocks\n <\/td>\n\n 123.04 to 177.46\n <\/td>\n\n 44.23%\n <\/td>\n<\/tr>\n
      \n April Capital – Commodity Stocks\n <\/td>\n\n 146.93 to 191.36\n <\/td>\n\n 30.24%\n <\/td>\n<\/tr>\n
      \n Raiffeisen \u2013 Electric Power Industry\n <\/td>\n\n 4 383.35 to 5 407.21\n <\/td>\n\n 23.36%\n <\/td>\n<\/tr>\n
      \n URALSIB Energy Perspective\n <\/td>\n\n 16 397.89 to 20 219.97\n <\/td>\n\n 23.31%\n <\/td>\n<\/tr>\n
      \n Sberbank \u2013 Electric power industry\n <\/td>\n\n 851.60 to 1,030.45\n <\/td>\n\n 21.00%\n <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

      \n These funds have performed well in recent months, but as always, it is important for investors to be mindful of the risks.\n<\/p>\n

      \n \u2757 What should be taken into account when choosing<\/a> a mutual fund?
      \n<\/h3>\n
        \n
      1. \n Returns over the past years<\/strong>. It is important to look at the dynamics of returns over several years. This will help to better assess the prospects<\/a> of the fund.\n <\/li>\n
      2. \n Risk level<\/strong>. Choose a fund based on the level of risk you are comfortable with. Stocks may be more volatile, while bonds<\/a> may be more stable.\n <\/li>\n
      3. \n Commissions<\/a><\/strong>. Management companies charge fees for managing assets<\/a>. This factor also affects the final profit<\/a>.\n <\/li>\n
      4. \n History of the fund and experience of the management company<\/strong>. The reliability of the management company and its experience in the market are key parameters for long-term success<\/a>.\n <\/li>\n<\/ol>\n

        \n \u2049\ufe0f\ud83e\udd14 Popular questions and answers
        \n<\/h2>\n