By investing in Mutual Funds poses more benefits for you. The offered benefits are as follows:
1. Managed Professionally
The Mutual Fund is managed by Investment Managers having an experience in the Capital Market, in addition to the capability to maximize your investments through in-depth analysis of current economic and market conditions, including investment strategy options, and choice of suitable assets.
2. Practical and Flexible Investment Facilities
By investing in a Mutual Fund you are only required to deposit your money and let the Investment Manager structure your investments, as well as monitor your investment achievements through the daily published Net Asset Value of the Fund. The variety of existing Mutual Fund products presents you the ability to choose a product and or change to other products you feel suitable for you.
3. Affordable Investment
Anyone can make invest in a Mutual Fund. With a capital investment of Rp.1.000.000,- you gain the experience of investing in the Capital Market. With DIM’s current Investasiku Masa Depanku program, you can start your investments by making a deposit of Rp.200.000,- on a monthly basis.
4. Minimum Risks
The large amount of funds invested in the Mutual Fund offers greater opportunities for you to diversity your investments while lessening the risks related to such investments.
5. A Well Maintained Liquidity
You will be given the ability to redeem your investments on any trading day based on the Bursa Efek Indonesia calendar. Such convenience provides you with the liberty to arrange your investments that are suitable to your financial needs.
6. Transparency
All of the information relating to the Mutual Funds will be transparent, and you will be aware of where your assets are invested in. In addition thereto, the Investment Managers are required to keep you well advised of the related risks and fees you will be subjected to.
On the other side, we often face risks in our everyday lives, as is with investing in Mutual Funds. These risks are:
1. The Reduced Number of Participating Units
This is the foremost risk when investing in Mutual Funds. Reductions in the number of your participating units in a Mutual Fund product may occur due to the fluctuating prices of assets within the Mutual Fund. With shares, fluctuations are in line with market mechanism occurring at the stock exchange where it is traded; with bonds, the prices depend on movements of the interest rates; whilst in the money market, fluctuations moves in line with existing interest rates.
Additionally, economic as well as political conditions may also be the cause of the fluctuating prices. All political and legal policies related to the business world may have influence towards certain shares. For example, a significant increase in car taxes resulting in the downfall of car sales may, therefore, reduce company profits and in effect, lowers share prices of the company.
2. Credit Risks
Credit risks may affect and arise in debt and money market instruments due to the inability of the issuer to settle its obligations, or is in default. This, in itself, will affect the mutually funded assets and reduce your investment returns.
3. Liquidity Risk
Liquidity risks occur due to the inability of the Investment Manager if failing to immediately settle your redeemed transactions. To reduce such risks, the Indonesian Capital Market Supervisory Agency & Financial Institutions or BAPEPAM-LK has issued a rule stating that Investment Managers should settle all redemption transactions at the latest within 7 (seven) trading days effective as of your transaction date. Therefore, remember to always count backwards the required processing time when redeeming your investments to ensure the timely liquidation of funds. However, under force majeure conditions or other extra ordinary situations that are unpredictable in nature which may occur beyond the control of the Investment Manager will result in a temporary discontinuance of such your redemption process.
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